South Africa’s MTN drops prices on monthly data bundles

SA’s second largest mobile operator, MTN, will drop data prices for its 30-day bundles by up to 50% from mid-April, the company said on Friday.

MTN SA CEO Godfrey Motsa said the cost of a 1GB monthly data bundle, which has been the subject of much scrutiny by commission authorities, will fall from R149 to R99. “We won’t charge more than that,” he said.

In terms of lifeline data, MTN said it will provide each of its customers 20MB of free data daily — or the equivalent of 600MB per customer every month — through its instant messaging platform, Ayoba. The platform currently has 500,000 customers in SA.

The operator made the announcement at a briefing held at its headquarters in Johannesburg, joined by minister of communications and digital technologies Stella Ndabeni-Abrahams.

MTN said it will it announce further cuts for businesses and their other services.

After two year of investigation, the Competition Commission released its data services market inquiry report in December last year. The report said MTN and Vodacom had to independently reach an agreement with the regulator on substantially reducing data prices within two months of the release of the report.

The commission said there was scope for price reductions of 30%-50%.

The competition watchdog gave the two dominant mobile phone operators two months to slash internet connectivity prices or face prosecution. This deadline was subsequently extended to the start of March.

MTN has 29-million subscribers on its network and has been working to grow its data revenues. For the financial year to end-December 2019, MTN made R12.6bn in revenue from its data services in SA.

The ultimatum is likely to be seen as a victory for consumers, whose social media and street campaigns against expensive data gained traction in 2017 when the Competition Commission set up an inquiry into the sector.

For MTN and Vodacom, which control about 70% of the SA mobile industry, it comes as a blow to one of their biggest profit sources as data sales constitute an important source of their revenue in SA.

The findings have also turned the spotlight on the government’s failure to auction spectrum — a radio frequency that allows mobile phone operators to send voice and data over the airwaves — which mobile operators have long argued is vital to bringing the cost of internet data down.

At the end of last year, the Independent Communications Authority of SA (Icasa), the industry regulator, said it would start auctioning spectrum for both 5G and 4G bands in the second half of 2020.

Last week, Vodacom became the first major operator to introduce price reductions across all its monthly data bundles.  (Business Day SA)