Startling mobile pricing comments from Cell C CEO

Cell C CEO Alan Knott-Craig says that South Africa’s telecommunications companies have some of the biggest margins in the world, and that the time has come to lower prices and operate with lower margins.

Knott-Craig slashed the price of prepaid and contract voice and data prices within months of taking over as Cell C CEO, and surprisingly, he said that there is room to further reduce prices if needed.

He said that, when he decided on the 99c per minute (on per second billing) flat rate for voice calls, he left enough space to drop prices even further in case his competitors reacted to this new rate.

To date, Vodacom and MTN have not reacted to Cell C pricing, but Knott-Craig said that it is merely a matter of time before the two cellular giants will drop their rates.

The Cell C CEO said that operators can try to use “tricks” like charging per minute, instead of per second billing, or offering time-based discounts to delay true price cuts, but that it is inevitable that mobile prices must come down.

Further mobile termination rate cuts needed

Knott-Craig is also calling on the Independent Communications Authority of South Africa (ICASA) to reduce mobile termination rates (MTR) to at least 15c per minute.

He further called on the regulator and operators to do away with the differentiation between peak and off-peak pricing. According to the Cell C CEO this is an archaic pricing model which has no place in our modern world.

Knott-Craig is confident that he will be successful in driving mobile termination rates down. “As long as I am healthy, mobile termination rates will go down,” joked Knott-Craig.

He added that government and ICASA have seen that lower mobile termination rates resulted in lower call rates, and that further MTR price cuts will result in further retail price reductions.

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Startling mobile pricing comments from Cell C CEO