Vodacom launches 3G: throws down gauntlet with video calls deal

21 Dec 2004

South African mobile operator Vodacom has launched its third-generation (3G) mobile service and, in an aggressive marketing tactic, is offering video calls at the same price as voice calls to lure customers away from rivals MTN and Cell C. As a second string to its bow, the cellco is also offering a high speed wireless internet access service in direct competition to its majority shareholder, incumbent fixed line operator Telkom, and alternative providers Sentech and Wireless Business Solutions. Commenting on its aggressive debut in the 3G arena, Vodacom’s chief operating officer Pieter Uys said that tariffs had been set low in a calculated bid to outmanoeuvre its rivals by making the cost of video calls so low ‘you don’t have to worry about the tariff’. The gambit, which will mean that Vodacom will have to sign up a large number of customers to make money, is a blow to MTN which last month gambled on foregrounding voice services as the key driver in the South African market. MTN managing director Maande Manyatshe said that he did not expect 3G services to take off in South Africa, adding that MTN ‘believes that the main driver for 3G services is not customer demand but operators forcing technology onto the people’. Although Cell C and MTN have announced plans to launch their UMTS services sometime in 2005, Vodacom looks set to steal a march as, even when they are abroad, its users will be able to make video calls at the same cost as an international call – something that could prove a very attractive proposition.

Vodacom’s new 3G service has been priced at ZAR599 per month for 1GB of data – enough to download 20,000 PowerPoint slides or browse 25,000 web pages. Subscribers will also be provided with a free Vodafone Mobile Connect 3G/GPRS data card a SIM card provisioned for 3G and a free connection; per megabyte costs will be less than ZAR0.60. By launching a simultaneous move into the high speed internet access market, Vodacom hopes to entice upwards of 100,000 subscribers away from higher-priced rivals. At launch, the new 3G network covers parts of Johannesburg, Pretoria, Cape Town, Durban and key tourist holiday spots.

Telegeography’s GlobalComms 2.0