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MTN Challenges Other Service Providers With OOB Rates

Author: Melissa Cohen
Date: 2017-12-12
Local service provider, MTN has slashed out-of-bundle data costs by up to 80%. Could this be a step in the right direction for data prices?
With the Independent Communications Authority of South Africa's(Icasa) recent inquiry into high data prices, local providers feeling the under pressure. MTN is the most recent provider to question their data rates, more specifically, out-of-bundle rates (OOB). With the rise in petrol and the annual increase in inflation, South Africans continue to complain about ridiculous data prices. The local cellular service provider has altered their rates to be one of the cheaper OOB rates in South Africa. We spoke to MTN SA's Executive for Corporate Affairs, Jacqui O’Sullivan, who told us what MTN customers can expect.
Who has the most affordable broadband in South Africa? We found out!

Why The Data Cuts? 

Just two months ago, fellow service provider, Vodacom was in the news for the same thing. Vodacom cut their OOB rates to 99c/ MB. This was great news for many Vodacom customers as the previous OOB rate was R2/MB. This cut has prompted MTN to shred their prices even more. MTN users who use less than 5MB of OOB data will only pay 29c/MB. Users who use more than 5MB, will now be paying 60c/MB used. According to O’Sullivan, MTN looked at their customer base and noticed that many people use OOB data "accidentally".
"In our country, the most economically marginalized are often the lowest data users, people using less than 5MB of OOB data per month. These are customers that, in many instances often least afford it," explains O'Sullivan.
Just under five million of MTN's user base, is made up of customers who fall under the economically marginalized community.
"We have made these data pricing reductions despite the spectrum crunch that continues to hamper our industry. There is simply no doubt that the release of spectrum will further drive down the price of data which will benefit all South Africans."

Is "Opt In" The Easy Way Out? 

Like Vodacom, MTN has also requested that customers 'opt in' to ensure that they are charged the new OOB rates. "By asking customers to “opt in” we are seeking to maintain pricing transparency and to ensure all our customers are aware of the exact nature of their OOB charges," explains O'Sullivan. MTN customers are required to go to the USSD menu by placing the following code into the device: *141*0#  By inputting the code into the menu, the user will be barred from exorbitant prices. The problem comes in when users don't do this and are then forced to pay the previously pricey rates. Once the discounted OOB rates are applied, it doesn't matter whether the user is on a contract, pre-paid or Top Up, the same rates will apply. According to O'Sullivan, users will receive an SMS notification once their data bundle has been depleted. This will alert them to the fact that they will start being charged OOB rates.

Is MTN Coming Out On Top? 

MTN is one of the last service providers to drop the OOB rates in South Africa. Although this is the case, MTN has now claimed second place when it comes to being the cheapest provider of OOB rates. Here is a table below which outlines the price discrepancy of each provider's OOB rates:
Network Providers Out-Of-Bundle Data Prices for Prepaid/ Top-Up (per MB) Out-Of-Bundle Data Prices for Contracts (per MB)
Vodacom R1.50 99c R1.00  89c
MTN  R2.00 29c (for 5MB or less) 60c (over 5MB)  R2.00 29c (for 5MB or less) 60c (over 5MB)
Cell C  66c 15c 99c R1.10
Telkom  R1.00  29c  R1.00  75c

Future Plans 

The service provider currently has a promotion running on the MYMTNApp. Customers can purchase a weekly R49/1GB of data that will last a week.
"The promotion will run until 29 February 2018, with MTN having the option to extend it," adds O'Sullivan.
South Africa's providers, such as MTN, continue to argue that they can't afford to cut data prices, so customers can still expect to pay the ridiculous rates. O'Sullivan has assured users that MTN is trying its best to make communication cheaper.
"MTN will continue to provide innovative, cost effective and value-adding products. We have a strong focus on simplifying our products, improving the experiences of our many customers and creating opportunities for customers to personalise and shape their data and airtime bundles."
Although this might be the case, it has taken this long for OOB rates to drop, so how much longer will citizens have their life drained out of their pockets to talk to their loved ones?  

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