MTN on Friday announced a drop in the price of monthly data bundles and customers will now pay R99 for 1GB, 33% lower than previously.

The changes will be effective from April 15, said MTN South Africa CEO Godfrey Motsa.

The drop is part of a raft of changes to the prices of the mobile giant’s prepaid data bundles of between 25-50%, following recommendations by the Competition Commission in December.

Last week, MTN’s direct competitor, Vodacom, announced that it would cut prices by at least 30% less for their data bundles.

Motsa said he was confident that prices would continue to drop once the spectrum allocation is finalised. The Independent Communications Authority of South Africa (Icasa) is currently evaluating bids for the allocation of high-demand spectrum, which will enable mobile operators to roll out 4G and 5G infrastructure.

“I am confident that this year we are going to get spectrum,” he said.

Some websites free

In a statement, MTN said there were three main areas of focus for the company in reducing prices: prepaid bundles, lifeline data and the zero-rating of data for public benefit service websites.

For prepaid data, the price of monthly bundles of 1GB and below would be reduced by between 25 and 50%, with the 1GB price being slashed by 33%.

“This continues the work MTN SA has done to improve the affordability of data for its customers, having already brought the rate of data on its network down by 76% between February 2017 and February 2020,” MTN said.

Free data

The company will also give each of its customers 20MB of free data daily, or the equivalent of 600MB per month, through its instant messaging platform, Ayoba.

It has around 500 000 existing Ayoba customers.

Zero rated access

The company already offers zero-rated access to some websites, including schools and universities, but MTN plans to extend these websites to include public health, public universities, vocational colleges, educational resources and employment sites. It plans to offer a monthly 500MB free data access service to these websites.

“While there will be pressure on MTN SA’s short-term financial performance from these initiatives, MTN believe that the reduction in pricing will be compensated over time by elasticity and customer growth, and growth in prepaid data service revenue will return in a couple of quarters,” the company said.

MTN is still in talks with the Competition Commission to formalise the changes

The current price for 1G is R149, and Motsa said R99 is going to be the maximum price the company would now charge for a gig of data.