MTN slashes data prices in CompCom deal

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MTN slashes data prices in CompCom deal

Published Date: 2020-03-23 | Source: Stephen Gunnion | Author: Stephen Gunnion

MTN slashes data prices in CompCom deal

The network operator says it will reduce the price of its monthly bundles by up to a half next month.

MTN has agreed to cut the cost of data for its customers in a move that will impact its short-term financial performance. Following negotiations with the Competition Commission, the network operator said it had developed a set of voluntary undertakings in the form of a social compact to address the affordability of data services.

In December, the Competition Commission threatened network operators with prosecution if they didn't cut data prices. That followed a two-year inquiry into their pricing. The Commission focused to a large degree on the price of 30-day pre-paid data bundles, which it believed were out of kilter with prices globally.

MTN said it would reduce the price of its monthly bundles of 1GB and below by 25-50% from next month, with the the 1GB bundle falling by 33% to R99. It said it had already decreased the effective rate of data on its network by 75% over the last three years. It will also provide SA customers with 20MB of free data daily through Ayoba. Its instant messaging platform already has half a million customers in SA and is expected to continue to scale. Lastly, it will extend its zero-rated data services, which currently include a range of websites including schools and universities, to other public benefit services such as health, and employment sites. Its OpenTime service, which launches next month, will offer 500MB a month of free access to public benefit websites for each of its 29 million local customers.

Earlier this month, Vodacom announced it would cut data prices by at least 30% from the beginning of next month. The network operator said the price cuts would result in a R2.7 billion boost for its customers, including some free data services.

MTN said the release of new spectrum was urgently needed and would support its ability to service increased customer demand. SA had the lowest spectrum allocation of all its markets in Africa and the Middle East, it added.

After rising as much as 8.9% in early trade MTN's shares turned around to close 9.3% down at R35.66 on Friday.





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