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MTN to drop its data prices ‘soon’

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MTN is promising “good news” for its customers regarding data pricing cuts, as the operator is about to conclude its negotiations with the Competition Commission (CompCom).

MTN Group CEO Rob Shuter says the operator is “very close to coming up with a set of undertakings” in its negotiations with the CompCom that will see the telco announce price reductions on its data packages.

In December, the CompCom hit MTN and Vodacom with a devastating curve ball, recommending they reduce their mobile data pricing by half.

The competition watchdog, which had investigated the cost of data in the country over two years, presented its final verdict through the Data Services Market Inquiry report, which was scathing to both carriers, ordering them to reduce data prices within three months, or face prosecution for exorbitant pricing.

Addressing journalists yesterday at its financial results presentation for the year ending 31 December 2019, Shuter explained the deal with the CompCom is imminent.

“We have had very constructive engagements with the commission since they released their inquiry report, largely driven by our MTN SA CEO Godfrey Motsa, myself and CFO Ralph Mupita, who participated in many of those sessions.”

Over and above that, he said: “I believe we are now very close to coming up with a set of undertakings. We are making progress and we will have good news for our customers.”

Additionally, Shuter said MTN engaged with the CompCom despite having different views regarding the report.

“I think our position right from the start has been that we don’t necessarily agree with the report’s recommendations” but MTN is “an organisation that is committed to dialogue”.

Last year, Shuter criticised the CompCom report on data pricing in SA, saying it creates complexity for the telecoms industry.

“We believe that across all the categories, and while we do acknowledge there is work to be done in prepaid pricing, we don’t agree with the conclusion that this is because of a lack of competition.

“We find it odd that someone would conclude that a market is essentially competitive for voice, enterprise and postpaid data, and not for prepaid data,” he said at the time.

The latest promise by MTN to cut costs comes on the back of a CompCom and Vodacom multi-year agreement, in which the telco vowed to substantially reduce monthly data bundles by over 30%, claiming it will save consumers R2.7 billion in data costs.

In the agreement, effective from April, Vodacom headline data prices will come down by over 30%. For example, the key 1GB monthly data bundle will drop from R149 per 1GB to no more than R99 (including VAT). This represents a 34% price decrease.

Furthermore, Vodacom shall extend personalised discounts to prepaid customers in all suburbs and villages where most of the population have income levels below the upper-bound food poverty line. This will cover more than 2 000 localities.

In addition, Vodacom committed to make available all of its current zero-rated services on one platform, through its ConnectU, service, which will provide two free SMSes daily to all prepaid customers who had at least one revenue-generating activity in the preceding 30-day period.

Meanwhile, Telkom welcomed the CompCom’s commitment to lowering prices and said it is studying the Vodacom, CompCom announcement.

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