{"id":33174,"date":"2013-03-08T00:29:47","date_gmt":"2013-03-07T22:29:47","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=33174"},"modified":"2013-03-08T08:33:30","modified_gmt":"2013-03-08T06:33:30","slug":"mtn-ceo-warns-cell-c-on-price-war","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/trending\/33174\/mtn-ceo-warns-cell-c-on-price-war\/","title":{"rendered":"MTN CEO warns Cell C on price war"},"content":{"rendered":"

MTN Group<\/a> president and CEO, Sifiso Dabengwa<\/a> has warned South Africa\u2019s smaller operators about the current price war, claiming \u201cit\u2019s very difficult to win\u201d.<\/p>\n

Speaking on his Money Show programme on Talk Radio 702 on Wednesday (6 March), Bruce Whitfield<\/a>\u00a0questioned Dabengwa on\u00a0Alan Knott-Craig<\/a>‘s impact on the “price war game” since his appointment as\u00a0Cell C<\/a>\u00a0CEO in April 2012.<\/p>\n

Dabengwa said: \u201cOne of the advantages of operating in many countries, is that you can always say, well I have seen this movie before, and it\u2019s no different from what we have seen in any other country. So what will happen is that there will be the price war.\u201d<\/p>\n

Dabengwa warned though, that if the likes of Cell C tried to fight the bigger operators on price, \u201cit\u2019s very difficult to win”.<\/p>\n

“I think you have to fight it on other fronts, other than price,” he said.\u00a0\u201cIt\u2019s very difficult to grow value share on price competition.”<\/p>\n

The CEO said that MTN has experienced significant pricing competition in a number of countries including the likes of Uganda, Ghana, and Nigeria.<\/p>\n

\u201cBut the reality is\u2026in most of these countries there are too many operators, and all operators are fighting for market share, and probably the easiest way to try and get market share is to reduce prices.”<\/p>\n

\u201cThe reality is that also has an impact on the overall market value. There definitely is value destruction in that form of competition,\u201d Dabengwa said.<\/p>\n

He further stated that what tended to happen, as had been the case in India, was that as prices hit \u201crock bottom\u201d, some operators \u201cdecided to literally pack up and go, and prices start inching upwards again, because at the end of the day, these business have to invest a lot of money\u201d.<\/p>\n

Dabengwa said that in order to get a reasonable return, the pricing had to reflect the kind of investment that had to be made.<\/p>\n

Analyst and chief investment officer at First Avenue Investment Management<\/a>, Hlelo Giyose<\/a> said that it was \u201cdistressing\u201d that MTN\u2019s financial results showed how South Africa is the only place where prices aren\u2019t coming down as much as in other African countries.<\/p>\n

\u201cCell C has actually done a great thing to foster competition in this market,\u201d Giyose said.<\/p>\n

\u201cI think it\u2019s making a difference. Vodacom<\/a>\u2019s results a couple of weeks back (6 February) show that. They\u2019ve also talked about it for the first time very openly \u2013 that this is a problem.\u201d<\/p>\n

Shares in MTN declined for a second straight day on Thursday (7 March), down\u00a0R1.93 or 1.09%, to R175.40\u00a0after the group’s results fell below analysts estimates.<\/p>\n

More on MTN<\/h3>\n

Lower mobile prices sustainable: Alan Knott-Craig<\/strong><\/a><\/p>\n

MTN lifts revenue, ups dividend<\/strong><\/a><\/p>\n

MTN defends neutral approach to price war<\/strong><\/a><\/p>\n

Vodacom, MTN feel Cell C\u2019s punches: investor<\/strong><\/a><\/p>\n

Prices Plummet in mobile price war<\/strong><\/a><\/p>\n

Rivals \u201cnowhere near\u201d Cell C on prices: Blue Label<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

MTN Group president and CEO, Sifiso Dabengwa has warned South Africa\u2019s smaller operators about the current price war, claiming \u201cit\u2019s very difficult to win\u201d.<\/p>\n","protected":false},"author":9,"featured_media":10679,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34,1],"tags":[43,42,2160,26,28,1890],"class_list":["post-33174","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mobile","category-trending","tag-alan-knott-craig","tag-cell-c","tag-first-avenue-investment-management","tag-headline","tag-mtn","tag-sifiso-dabengwa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/33174","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=33174"}],"version-history":[{"count":9,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/33174\/revisions"}],"predecessor-version":[{"id":33182,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/33174\/revisions\/33182"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/10679"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=33174"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=33174"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=33174"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}