Nowhere for MTN, Vodacom to hide as SA’s mobile price war erupts

 Interviews

First Avenue’s research analyst Nadim Mohamed has finished crunching his numbers on the impact of the sharp drop in SA’s Mobile Termination Rate. As his chart reproduced below shows, from being 6th highest of 54 countries surveyed  – generating super profits for the MTN/Vodacom duopoly – SA is now 12th lowest. Mohamed warns of significant implications for the two companies which between them hold 90% of the SA market. Particularly Vodacom which generates 89% of its EBITDA in the country (MTN gets 25% of its profit from SA). In his initial report a year ago, Mohamed reckoned the only way Vodacom and MTN had been able to ignore price cutting from Cell-C and Telkom Mobile sharp was by using “smoke and mirrors”. But consumers are seeing through the marketing hype and, aided by a Regulator determined to drop prices, are comparing apples with apples and have found their existing contracts to be rotten. Mohamed came through to the CNBC Africa Power Lunch studio today to talk us through his findings.You can download his full report by clicking here. – AH

Read more on the interview conducted by Alec Hogg of biznewz.com:

http://biznewz.com/icasa/

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