Vodacom yesterday outlined a new talk-time tariff for prepaid customers; a rate it says is the lowest in the country.
The new rate - R1.40 per-minute, with 30-second billing intervals after the first minute - comes just after 8ta launched with its R1.50 per-minute tariff. Cell C says it has had the R1.50 per-minute tariff since last year, with its EasyChat Allday prepaid package.
Vodacom, 8ta and Cell C offer these prepaid tariffs as a flat rate for calls across all networks. Customers will also pay the flat rate for calls made within and outside of peak times.
8ta is the only provider with a lower rate to Telkom's land-lines: 65c per minute. The other cellular providers charge calls to Telkom lines at the same flat rate used for cellular calls.
MTN was unable to confirm whether it will follow suit with reduced pricing. Its current price for prepaid calls, on the MTN One Rate per-second billing system, works out to R1.75 per-minute. There is no regular per-minute billing.
Steven Ambrose, MD of WWW Strategy, says: “There is no question that MTN is going to react to the recent activities in the market.”
Asked whether the introduction of 8ta has caused these changes, he comments that the introduction of a fourth provider “changes the dynamic of the cellular market”.
“The next area that will become competitive is contracts,” Ambrose continues. 8ta has yet to launch its contract offerings. He predicts 8ta will offer “very competitive rates, but the magic will be in the billing and bundling”.
“The truth is, the contract market is not as price-sensitive as the prepaid market,” notes Ambrose. He forecasts that once 8ta launches its contract offerings, consumers will see adjustments in the monthly packages offered by Cell C, MTN and Vodacom.
“They are more likely to give better value,” he says, citing the fixed revenue from current monthly payments on contracts.
Ambrose adds that data will be the next big price war when “Cell C finally (end of November) goes national with its data offering”.
The third mobile provider currently has the lowest overall data costs with its upfront-payment bundles. A 2GB/month annual bundle costs R999 - or 5c per megabyte.
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