Cell C confirm latest tariff cut in price war with Vodacom

Cell C CEO Alan Knott-Craig Sr has announced a further cut in international calling tariffs, the latest instalment in an escalating price war between the telecom and its rival, Knott Craig’s former employers Vodacom.

The promotional international rate sees costs slashed to 85 cents (US$0.09) per minute on a per second billing basis for calls to 50 countries – effective for both mobile and landline calls.

Cell C will extend the offer to its customers until January 31, 2013, in what is an undisguised attempt to outdo rival Vodacom.

Cell C cut international prices to 99 cents (US$0.11) per minute in May of this year, as newly appointed CEO Knott-Craig returned from early retirement and immediately launched a very vocal and aggressive war against Vodacom – which is headed up by CEO Shameel Joosub, the one-time protégé of Knott-Craig during his stint at the helm of Vodacom.

In response, Vodacom cut prices to 89 cents (US$0.10) per minute, although the new rate did experience some delays in its launch, eventually happening last week. Knott-Craig said at the time that if the new tariff was ever implemented, he would go ahead and cut costs further – which he has now done.

Furthermore, Vodacom charges its users a monthly R5 (US$0.56) fee to benefit from the lower rates, and customers have to opt-in to the lower tariff by texting or calling a number from their mobile devices. The promotion will be available until December 31, 2012. 

Knott-Craig has ensured customers that the Cell C promotion is free, and lasts longer. The company announced: “Cell C customers will not have to pay a monthly fee and don’t need to opt-in (no catches, no restrictions, no fine print, no clauses… it’s that simple!) to benefit from the lower call rate.”

Knott-Craig added in a press statement: “We promised we would better the rate if our competition responded to our standard international call rate, and we have. Now, with the 85c promotion, Cell C customers can truly experience the lowest international call rate in South Africa from a mobile phone.”

The rivalry between the two CEOs is undoubtedly great for the consumer – with prices taking a rapid succession of cuts over the past few months – but it remains to be seen how long the very public price war can continue before some form of truce is necessary.

Posted in: Telecoms

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