Vodacom has joined MTN, albeit temporarily, in dropping its prepaid call rates to 79c per minute in the latest promotion from the largest South African cellular network. The new call rate will be available to all of Vodacom’s prepaid subscribers but will not be made available to those on Top Up or postpaid contract clients.

To get the new call rate customers will have to opt in by using Vodacom’s Free Change which can be done for free, one a day, in one of three ways:

1. On Vodacom’s website
2. Dialing *111# and following the on screen prompts
3. Calling 1181 and following the voice prompts

Vodacom’s move mirrors that of MTN who last week dropped its prepaid call rates down to 79c a minute however, unlike Vodacom, MTN has also filed the requisite documentation with the regulator to make the rate a permanent fixture for the foreseeable future, something which has been seen as a major move against the smaller network operators in Cell C and Telkom Mobile.

When the new mobile termination rates (MTRs) were announced by ICASA it would have been easy to assume that either either of the smaller players would have dropped their call rates by 20c per minute. The new MTRs are the first to have brought in asymmetrical payments meaning that Vodacom and MTN have to pay Cell C and Telkom mobile more money for calls going to the smaller networks than the other way around. This should have paved the way for a drop in prices from Cell C in particular who have been aggressively pushing prices down in recent times but instead it was the incumbents who reacted first.

MTN and Vodacom ‘s subscriber bases dwarf that of the smaller players and can support the razor thin margins of a lower call rate simply by virtue of larger volumes of calls, even if Cell C went down to 79c/minute they would lose money in comparison to the larger players over time. Besides that, because of the size of their respective customer bases (80% of the entire mobile market according to ICASA) most of the termination rates paid are between Vodacom and MTN themselves and therefore have no asymmetry to worry about.

UPDATE: While we were in the throws of writing up this story, Vodacom deemed it necessary to launch ‘Chat for 20’, a new promotional bundle that offers 20 voice minutes for R10 to call any network at an effective rate of 50c per minute. As always however there are caveats to these fantastic deals.

1. A maximum of seven Chat for 20 bundles can be purchased during any week (each week runs from Monday to Sunday).
2. Bundles can only be purchased between the hours of 6AM and 10PM.
3. The bundle’s inclusive minute must expire at 23:59 on the day of purchase.
4. Calls will be calculated on a per minute and not per second basis.