The entry of SA's fourth mobile operator 8ta, or Telkom Mobile, is set to catalyse much-needed change in the industry, as the newcomer aggressively competes with Vodacom, MTN and Cell C from the get go.
The newcomer officially entered the market following a launch event, held at Lanseria Airport last night, saying it is hungry to compete and hungry to succeed.
When third mobile operator Cell C entered the market, consumers expected major change in the industry but were disappointed to find the sector's high pricing more or less unchanged.
8ta has come in with some aggressive pricing and has committed to closing the gap in the market for converged fixed and mobile voice and data offerings. This in turn may spark a price war between the operators in an effort to stay competitive.
Speaking at the launch event last night, Telkom SA MD Nombulelo (Pinky) Moholi said 8ta will aspire to completely disrupt the mobile industry and change the rules of the game.
She added that the newcomer would strive to change the way South African consumers think, buy and consume connectivity.
Only time will tell whether this will be enough for the newcomer, which is entering an already saturated market, to succeed.
Nonetheless, 8ta has come to market with some “unique” offers and aggressive pricing. Telkom Mobile managing executive, Amith Maharaj, believes market competitors are probably keeping a close eye on 8ta and its progress, and will have to adapt to remain competitive.
He adds that 8ta will be doing the same and is committed to “driving things forward”.
Mobile gaps
Maharaj today told ITWeb that extensive market research led 8ta to develop a business case that would fill gaps in the market related to value and simplicity.
The network will be provisioned to support download speeds of up to 21Mbps. In addition, the network hardware allows for a seamless migration to LTE (4G), he continued.
He argues that the cost efficiency of the technology involved has enabled 8ta to offer some unique deals.
Last night, Maharaj noted that for the first time in SA, all prepaid customers will benefit from free talk time to any network every time they receive calls from a mobile phone - one free second of airtime for every three seconds of call received. "This benefit is available all day, every day," he explained.
Additionally, when users send five SMSes in a day, 8ta will give subscribers 50 bonus SMSes at no extra cost to use that same day, continued Maharaj.
While these offers are new concepts to the South African mobile industry, pricing remains the key differentiator for any offering.
Apples and pears
According to Maharaj, calls from 8ta to a fixed-line will cost 60% less than typical market rates for similar calls. Calls from an 8ta mobile phone to both Telkom and Neotel fixed-lines will be priced at 65c per minute, independent of the time of the call (hence no peak and off-peak rates).
There will also be a flat rate of R2.50 per minute for calls from an 8ta mobile phone to over 100 international destinations.
But compared with similar pricing from other mobiles, does 8ta compete? Click here to see a comparison table.
8ta prepaid Internet customers will get an out-of-bundle rate of R1 per megabyte, while prepaid data bundles can be purchased for as low as 25c per megabyte.
The prepaid data bundles that will be available at launch are: 100MB for R50; 250MB for R100; 500MB for R150; and 1GB for R250.
Entry-level prepaid options from Vodacom include MyMeg 8MB at R9.25, at R2 per MB out of bundle.
MTN's entry offer is a 10MB data package for R10 at R1 out of bundle, while Cell C offers data at R2 per MB.
8ta's prepaid offering will be commercially available, through various retail outlets, from Monday, 18 October.
Phased launch
With only a prepaid offering launch, little is known as to what sort of pricing the operator will offer in its post-paid packages which are expected in November.
However, high-end consumers can be assured 8ta has plans to bring Android and BlackBerry to the market by the end of the year, and is actively working on an iPhone introduction with its channel partners.
The operator has also alluded to a strong focus on the enterprise space in which it intends targeting existing fixed-line customers with bundled options. However, Maharaj would not reveal any more detail on the expected offerings.
He said 8ta has strategically followed a phased launch, beginning only with a prepaid offering, so as to ensure a “smooth as possible” entry into the market. However, the company is honing its enterprise and post-paid offerings, and will be ready to aggressively compete in these areas as well.
“I'm not exaggerating when I say this is the start of a new era in mobile phone communication in SA. Consumers will, at last, have a real choice,” concludes Maharaj.
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