Data price cuts: MTN join Vodacom in massive price slash
Data is indeed falling, with MTN the latest data giant to announce cuts to its data costs following on from Vodacom.
After Vodacom’s agreement with the Competition Commission to cut data costs in South Africa by 30%, mobile provider MTN have now followed suit, announcing that they will reduce the price of its monthly bundles of 1GB and below by between 25-50%.
MTN South Africa CEO Godfrey Motsa announced the move, which is in line with the Completion Commissions findings that data providers have been charging exorbitant fees, with South African data among the most expensive in the world.
A proud Motsa spoke to the media on Friday, saying that when he was put in charge of the cellular giant in 2017, his primary mandate was to make data more accessible for the masses.
He said that the cost cut would allow more people to gain access to crucial online services.
“From 1 April the price of monthly bundles of 1GB and below will be cut by 25-50% and the 1GB monthly bundle will decrease by 33% to R99.”
Free services
The group also announced a list of free services that would be available to its customers.
MTN will now provide each of its customers with 20MB of free data daily through its instant messaging platform, Ayoba.
“MTN SA will offer a monthly 500MB free data access to public benefit services websites every month, amounting to 6GBs per year, for each of MTN SA’s 29 million customers,” the company said.
MTN’s new prices will be effective from April 1.
MTN financial viability
On the financial side for the company, the group said that reducing it’s prices would be viable for the long term success of the company.
“This continues the work MTN SA has done to improve the affordability of data for its customers, having already brought the rate of data on its network down by 76% between February 2017 and February 2020,” MTN said.
“While there will be pressure on MTN SA’s short-term financial performance from these initiatives, MTN believe that the reduction in pricing will be compensated over time by elasticity and customer growth, and growth in prepaid data service revenue will return in a couple of quarters,” the company said.
The company also announced that they would be using a new spectrum to transfer data, making the deal possible.
“Radio spectrum is the digital highway upon which we depend to carry increasing mobile data at more cost-effective prices. This is acutely felt in South Africa, which has among the lowest spectrum allocation in all our MTN markets.
“The release of new spectrum in South Africa is urgently needed and will greatly assist our ability to service increased customer demand in a more cost-effective manner,” it said.