Why ninety-nine cents is still too much for a cellphone call

South Africa is country with an incredibly high mobile penetration, but which has always suffered from excessively high voice call rates. This week it seemed like all that was changing.

The country’s third operator CellC threw the first volley, announcing that call rates on prepaid packages would drop to 99c per minute. Vodacom, the country’s first and biggest operator, responded in kind, saying that it too would reduce its rates to 99c per minute.

And the masses rejoiced.

My question is simple: Is this a genuine overture to provide a quality service to its clients or simply “just enough” to placate the masses? And what about contract users who are stuck in ridiculous 24 month contracts that are required to pay such absurd rates as almost R2.50 per minute?

But let’s put contract users aside for a minute, shall we? Let’s forget for the time-being that contract clients and their residual income remain the backbone of any telecommunications company’s income.

Let’s focus on one question: Is 99c enough to make us happy? From the noises made by the press, the public and toads and trolls-under-the-bridge, it seems to be. While everything around us keeps increasing we can finally look to cheaper call rates.

Let’s completely forget about the fact that for the last 15-odd years South African mobile users have been summarily robbed blind by the same said-companies. Am I coming on too strong?

We all know that call rates in the USA and Europe are a lot cheaper. “Ah! But they have more competition!” you’ll shout. “They have less mileage to cover with towers,” the service providers will tell us. All too true.

But it only takes a cursory glance to Namibia, South Africa’s poorer northern neighbour, to see how skewed this point of view is. Just to put things into context:

Namibia has just over 2.1-million subscribers. Its main Service Provider, MTC, lays claim to 2-million subscribers. Its only competition is a company called Leo which, by all accounts, seems to be bankrupt. MTC therefore has no competition to speak of.

Namibia isn’t exactly small either — it is about three times the size of Germany — and those 2.1-million people are spread all over the show. MTC, however, claims that it provides coverage to 95% of the population. (Sneaky that, rather than boasting coverage of the country, but it would suffice, would you not agree?)

So would it be fair to say that MTC has a much greater area to service and zero competition. It also has a maximum customer base of 2.1-million people — about half the size of the city of Cape Town.

So with no competition and vast lands to cover, what kind of rates are MTC Prepaid Customers paying?

Forty-nine cents per minute to any network. Anytime.

No off-peak rates to worry about. No concern whether the person you’re calling is on Leo or NamTel. And data? A cool 50c per minute.

But wait! There’s more!

If you’re a Savvy Subscriber, you can sign up for Aweh – a service for prepaid customers that gives you 50 FREE MINUTES per day and 100 SMSES PER DAY. That’s only R120.00 per month (billed at R30/week). And they’ll throw in 30MB of data per week.

Still too rich for your blood? Try Aweh Lite. At only R15 per week you get 50 free minutes per day, 30 SMS per day and 15MB of data per week.

Out of bundle rates? 49c per minute and 50c per Megabyte. I could live with that.

And what does MTC offer contract customers? 38c per minute. Any network, any time.

So while most South Africans cheer at 99c per minute price for prepaid customers, I’m still livid. I don’t care much for concepts like “interconnect fees” and “regulation” and “whatnots”.

If MTC can run a profitable business model at these ridiculous rates in an impoverished and over-regulated country like Namibia, then why are networks in SA charging these rates? Because they can. And because South Africans let them.

My advice? It’s time to grab a pitchfork and storm your nearest service provider. Down with the oligarchs!