MTN Group says it expects prices for voice and data to stabilise in 2014, following a price war in the South African industry over the past 18 months.
MTN Group chief executive Safiso Dabengwa said: “We think we will see more stability” relating to voice and data in 2014. “2013 was very aggressive,” he said.
Dabengwa has been critical of smaller competitors in the past, warning that “they start doing very destructive things in the market in the hope that it will improve their position”.
Speaking at MTN’s headquarters in Johannesburg recently, Dabengwa said that he didn’t expect any decision around mobile termination rates to change anything regarding competition in the SA market.
MTRs are the fees operators charge one another when calls from one network have to be routed to another.
The Independent Communications Authority of South Africa (Icasa) is expected to implement new call termination rates on 1 April 2014, however, both Vodacom and MTN have initiated court proceedings against Icasa.
Cell C and Telkom
It is not clear yet whether the smaller operators including Telkom and Cell C will have appetite for another round of price competition.
Telkom said that the new termination rates would “substantially contribute to reducing the cost of communication and the consumer will be the biggest beneficiary”.
“Telkom will pass on reductions to consumers and will communicate these savings once it has fully assessed the impact of the regulations,” the group said after Icasa’s announcement in February.
Cell C’s chief financial officer, Robert Pasley, told Techcentral that “Cell C’s rates are already very competitive, so consumers shouldn’t expect dramatic price reductions”.
Cell C said in an official statement that the new rates will promote and foster a more balanced and competitive mobile industry to the benefit of consumers.
“By increasing its share of the market and putting further pressure on the dominant competitors, Cell C is confident it can drive access to more affordable communications for all South Africans, even those not on its network,” Cell C said.
MTN South Africa CEO Zunaid Bulbulia agrees with Dabengwa’s sentiment, and questioned how low the smaller operators can afford to go in order to maintain some semblance of profit.
He said that the market share for MTN’s SA operation has remained stable at around 34%-35%. He noted that the group had added 700,000 subscribers in the last quarter of 2013.
Looking ahead, the guidance in 2014 is for a net addition of 2 million SA subscribers.