MTN has decreased voice and data tariffs by 58% and 73% respectively in the last five years, despite an increase in costs due to a struggling economy, the company has told Parliament.<\/p>\n
The portfolio committee on telecommunications and postal services was meeting this week to listen to presentations on the \u201ccost to communicate\u201d in South Africa.<\/p>\n
Graham De Vries, head of corporate services, told the committee on Wednesday that\u00a0its consumer charges for both phone calls and data have actually declined in the last half decade, despite ongoing calls for \u201cdata to fall\u201d this week.<\/p>\n
\u201cWe are in a very competitive market, and there is significant pressure to ensure we satisfy our customers,\u201d he told MPs.<\/p>\n
\u201cBut we also need to balance that with our shareholders\u2019 expectations, and it\u2019s a fine balancing act.\u201d<\/p>\n
The company has also reduced marketing spend by 36% since 2011, he said.<\/p>\n
South Africa has yet to migrate to digital broadcasts, a key requirement for opening up radio spectrum for faster and more widespread mobile internet services.<\/p>\n
De Vries told the committee that more frequency would have a \u201csignificant effect\u201d on costs.<\/p>\n
\u201cIt will mean we will not have to roll out further base station structures,\u201d in answer to a question from DA MP Cameron Mackenzie.<\/p>\n
\u201cIn general, it will lead to a reduction of our input costs, because we can apply it on top of our [existing] network costs.\u201d<\/p>\n
He did\u00a0though add caution, saying there were other costs involved that were not yet accounted for in the potential release of bandwidth.<\/p>\n
\u201cIn order to bid for the available spectrum, a bidding company needs a R3bn reserve price.<\/p>\n
\u201cOn top of that, there is no way of knowing what the final price for the available spectrum will cost once bidding concludes.\u201d<\/p>\n
He also said he hoped that government would not \u201cexperiment\u201d with the bidding process, given its importance.<\/p>\n
EFF MP Fana Mokoena, who had been critical of competitor Vodacom earlier on Wednesday, accused MTN of focusing its efforts in Nigeria more than in its home base South Africa.<\/p>\n
But MTN SA Chief financial officer Sandile Ntsele disagreed with Mokoena, saying it is difficult to compare across markets.<\/p>\n
\u201cWe are materially the same on a dollar-to-dollar basis,\u201d he said.<\/p>\n
\u201cIn general, we do a comparison across the 22 countries we operate in, and in general we stay the same [with regards to investment].<\/p>\n
\u201cI can clearly state we operate on a country-by-country basis. Each country has its own board of directors, its own targets etc,\u201d Ntsele added.<\/p>\n
Ntsele said MTN Nigeria and MTN South Africa contribute approximately 65% of the group\u2019s profits.<\/p>\n
\u201cIt would be irresponsible not to have our mindset on these two markets.\u201d<\/p>\n
De Vries, meanwhile, who pitched his presentation at a less celebratory tone than competitors Vodacom, admitted there were many challenges amid the \u201cdata explosion\u201d in South Africa.<\/p>\n
\u201cOur revenues are flat, whilst data costs are increasing on a yearly basis,\u201d De Vries said.<\/p>\n
\u201cThere are also external pressures that we cannot control. The devaluation in the currency has been driven down by 40%.<\/p>\n
\u201cThat means if we want to do the exact same thing operationally, it costs us 40% more.<\/p>\n
\u201cMost of our equipment is imported from overseas, and it is priced in dollars,\u201d De Vries added.<\/p>\n
Presentations continued on Wednesday. The committee was still to hear from Cell C, Telkom and Neotel.<\/p>\n
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