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Cape Town - The latest network operator to launch in South Africa has announced an aggressive call rate.
Mobile virtual network operator (MVNO) me&you mobile has said that its lowest call rate is expected to be 39c per minute call rate for the operation which launches on May 4.
MVNOs use the infrastructure of other mobile operators in a bid to lower costs. And me&you is using the Cell C network while targeting signing up subscribers in urban areas.
"We don't have those overheads that the others guys would have," Brett Howell, CEO of me&you mobile told Fin24.
The me&you network has also provided Fin24 with a list of planned call rates.
In-bundle voice rates:
R50 package: 69c\min
R100 package: 69c\min
R200 package: 59c\min
R300 package: 0c\min (Free calls)
R400 package: 49c\min
R500 package: 39c\min
Out of bundle rates are the same across all packages:
Voice: 79c\min
SMS: 60c\SMS
MMS: 70c\MMS
Data: 99c\MB
Cell C deal
After Fin24 reported the me&you launch on Wednesday, some users expressed their scepticism over the network.
Fin24 user Hein Roos issued this comment: "If you want to start a new operator and want to use another operator's towers you are already doomed. If you undercut their prices all they have to do is increase their rental for the towers and soon you will be in a heap of trouble and will be forced to increase prices that put you on par with the operator you rent your towers from."
"Good luck and I hope for the best. Will keep an eye on you or, is it me & you," wrote Roos.
But Howell insisted that the deal with Cell C is sound and in the interests of me&you mobile subscribers.
"So our agreement with Cell C is that we get a wholesale rate so fluctuations in their pricing won't directly affect our customers. We build our own products based on pricing we get from them and we build it into our model - and our model is completely separate," Howell said.
Unlike traditional network operators, me&you will not have physical stores, as it instead opts to run the operation completely online.
Niche offering
"I'll tell you how it works from our side: Obviously being an MVNO you have to be niche unless you have deep pockets to compare the R100m advertising spend above the line," Howell said about the marketing budgets of the senior South African operators.
In SA, Vodacom has around 31 million subscribers while MTN has around 20 million. Cell C has been the most aggressive as the junior operator seeks to drive subscriber growth. But Cell C's major shareholder, Dubai-based Oger Telecom, has indicated that it may want to sell its 75% stake in the South African mobile network.
But Howell said that his MVNO me&you is not concerned with a massive operation.
"We have a niche offering with a focused marketing campaign. It doesn't rely on scale; it relies on a fairly decent sized base but because of the way we've been set up online; we've outsourced key functionalities to MVN-X (a company that runs networks) from a network infrastructure service perspective," said Howell.
Virgin Mobile has demonstrated that the MVNO market in SA is fraught with difficulty. While the company launched as a joint venture with Cell C in 2006, it has still to hit one million subscribers in the country.
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