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Prepaid price war rages on

Bonnie Tubbs
By Bonnie Tubbs, ITWeb telecoms editor.
Johannesburg, 20 Feb 2013
MTN enters the prepaid price war, bundling free services with its new starter pack.
MTN enters the prepaid price war, bundling free services with its new starter pack.

The prepaid price war that broke out over the past month has become a war of three, as MTN joins the fray with the launch of a new starter pack, offering a range of free perks.

Following in the aggressive footsteps of rivals Vodacom and Cell C earlier this month, MTN yesterday unveiled a new prepaid product. The MTN Mahala starter pack gives customers free airtime, Internet bundles and SMSes for the first six months of use.

Serame Taukobong, MTN's chief marketing officer, says the operator's Mahala offering to prepaid customers has proven popular. MTN's Mahala product suite includes Mahala Thursdays, Mahala Day and Mahala Night, Mahala Weekend, Mahala International Calls and Mahala Data. "This has prompted us to introduce a new starter pack."

MTN says the Mahala Starter Pack, priced per second, gives 20% free MTN-to-MTN airtime value back to the customer for R10 or more recharges, for six months. "The new starter pack also rewards customers with a 10MB free Internet bundle for R100 or more airtime recharges per month [and] customers also get five free SMSes for every 15 SMSes they send."

In addition, says Taukobong, the new product allows customers to join MTN Zone, MTN's flagship prepaid product where customers qualify for up to 100% discounts on calls and SMSes.

Scuffle for subscribers

MTN's move comes three weeks after third operator Cell C introduced Supacharge - a permanent prepaid product - to the market. Supacharge gives Cell C prepaid and contract TopUp subscribers unlimited Cell C-to-Cell C anytime voice calls, valid for 30 days from the date of recharge, when recharging with R500 or more.

About 10 days later, Vodacom - SA's largest mobile operator by subscriber numbers - fired a responding round with the launch of Free4Sho, a new prepaid product suite offering customers a rate of R1.20 per minute to all networks and 57 minutes of free talk time every hour for on-net calls.

The latest move by SA's second operator validates what industry experts have predicted. World Wide Worx boss Arthur Goldstuck says we are going to see some "lovely price wars" across the board this year, while Deloitte Digital mobile tech manager Jon Hoehler reckons the mobile price war that started last year will continue well into 2013.

"The size of the mobile population and growing maturity of subscribers is going to again drive competition among the mobile operators. The price war will continue, with mobile operators jockeying for mobile subscribers across segments and product lines," says Hoehler.

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