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Vodacom's message gets cheap
CELLPHONE WAR
IN ONE of the most controversial salvos fired in the battle for cellphone subscribers between network operators Vodacom and MTN, Vodacom has said it will give its 1.1-million subscribers free access to their voice mail from July 1. It is a giveaway worth about R1-million a day. In a stinging counter-attack, MTN, with almost 1-million subscribers, says Vodacom has no option because "their voice mail service is so poor". The two network operators have been involved in an ongoing spat in a battle to attract subscribers. Vodacom currently charges 60c a minute to retrieve voice mail, MTN charges 60c at off-peak times and 68c at peak times. "Free voice mail should be a significant benefit to our subscribers. On an average weekday our voice mail platforms handle some 1.4-million calls," says Vodacom chief executive, Alan Knott-Craig. "Our market research shows that free voice mail would be a powerful incentive for people who are considering buying a cellphone. The SA market is far from saturated and the total potential number of users could be as big as 10-million. However, MTN's group executive: corporate relations, Jacques Sellschop, says Vodacom no longer seems to be able to justify taking their customers' money for voice mail. "We sympathise with Vodacom's users," he says. "By all reports their voice mail service is so poor that they have no option but to give it away. Perhaps they feel compelled to do this in anticipation of the KPMG-audited comparative quality tests." Sellschop adds that MTN has no plans to offer a free voice mail service to its subscribers. "We will always remain price-competitive," he says. Behind the smoke and thunder, however, a free voice mail service is a significant benefit to subscribers, many of whom spend up to 10% of bills on retrieving messages. Most of the rapid growth in South African subscribers is a result of prepaid systems introduced last year. Instead of enduring credit checks and long waits for clearance, getting a subscription, at about R150 a month, is now as easy as buying any commodity. The prepaid system has opened the cellular networks up to many who could not afford a cellular subscription. Many people now rely on voice mail as a way of keeping in touch. Vodacom's free voice mail covers prepaid and subscription services. Knott-Craig says prepaid customers account for almost two thirds of Vodacom's new business. "For many of these cellphone users, their voice mail is often their only reliable address." Vodacom's move also comes at a time when government is about to announce that it will license a third cellphone operator. ý Vodacom also announced on Friday that it has bought a 25% stake in GSM Cellular, an exclusive Vodacom service provider. At the same time, investment company MDM Growth Investments increased its stake in GSM Cellular from 20% to 25%. GSM Cellular has more than 130 000 customers and is responsible for 15% of all new Vodacom connections.
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