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Vodacom, MTN start per-second billing to counter Cell C's entry
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3 October 2001
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Vodacom and MTN, the cellphone operators, on Monday introduced their per-second billing services, effectively increasing the per-minute prepaid call rate by about 75c, or 26 percent, to R3,60.
Both providers are charging 6c a second for calls made during peak times and 1,5c a second for off-peak calls.
The off-peak time translates to 90c a minute, 65c less than the R1,55 currently paid for the first minute of the call.
Vodacom and MTN charge the same rates, about R2,85 a minute, for prepaid calls generated from their networks to a different network, but a little less for calls generated and terminated within their networks.
The average is about R2,60 a minute.
The Communications Users Association of SA has welcomed per-second billing, but warned the service should not be a disguised attempt to inflate the price by making it more confusing.
Meloy Horn, a telecommunications analyst with Merill Lynch, said that although per-second billing might appear to represent a higher rate per minute, it did not necessarily constitute a source of higher revenues for the mobile operators.
"The risk lies in the actual airtime usage of the subscribers on a per-second basis.
"Subscribers would now be charged for actual airtime utilised at a higher rate. This compares to the per-minute billing system, where subscribers are being charged for unused seconds in a minute, resulting in some level of subsidisation of the rate, [that is, more seconds billed at a higher rate].
"With per-second billing, the subscriber only pays for used airtime - fewer seconds billed at a higher rate."
The sudden decision to launch per-second billing, 33 months after Telkom introduced it in the fixed line telephony, is timed to counter Cell C's entry with the service next month.
It is also being introduced at the same time the operators are effecting tariff increases on their basket of services, reacting to a new interconnect agreement with Telkom.
The new interconnect agreement allows Telkom rights to adjust to inflation its tariffs.
It also ensures that Telkom gets more than double the 21c it received as a share for a R1,19 call generated from its network to a cellular network.
Vodacom is introducing per-second billing through its new package, Vodacom 4U, offering international roaming for prepaid users, and charges prepaid and contract the same, and has a 24 month network window access.
MTN is selling a R10 call-per-second card, with an access period of 30 days, which is loaded and the existing airtime credit is automatically adjusted to be billed per second.
MTN's international rates range from 12c to 36c a second. For the short message service, Vodacom retained its 75c charge and MTN kept its 86c per 160 characters during peak hours.
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http://www.busrep.co.za/index.php?fSectionId=561&fArticleId=116424
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