24 October 2008
Windhoek — MTC's pre-paid customers, who make up the majority of the mobile telephone company's clients, have no idea that they are paying more than what post-paid customers part with. Although having a post-paid service is seen as a status symbol, a recent research by the Namibia Policy Research Institute (NEPRU) has revealed that pre-paid customers are in fact paying more.
NEPRU said the introduction of VAT has left MTC's pre-paid services more expensive when compared to its own post-paid products.
"This provides incentives for pre-paid customer to change to post-paid. However many Namibians cannot afford to enter into 24 months obligation due to little or irregular income.
MTC would be well-advised to reduce the costs of its prepaid products," said Christoph Stork, a research associate at NEPRU.
Stork said Telecom Namibia has the cheapest products on offer for the passive user compared to MTC and Cell One
"MTC is slightly cheaper for the high user basket and considerably cheaper for the international user basket than Cell One. Cell One on the other hand is cheaper for low, medium and passive user baskets. It appears that MTC targets the higher end of market and Cell One the bottom end," Stork said.
Cell One's per second pre-paid is the cheapest. This is followed by MTC's Tango per second.
"Interestingly, for someone who would only consider MTC, the price difference between pre-paid without a free handset and post-paid with a free mobile is marginal at below N$6 a month. MTC seems to have allowed the gap between post-paid and pre-paid to narrow due to the Ministry of Finance imposing VAT on pre-paid services," Stork said.
According to Stork, Telecom Namibia's Switch products occupy four of the top five cheapest costs for the medium user basket the cheapest of them being N$132.
Cell One's cheapest product for this usage basket, the per second pre-paid, is N$148.32. MTC's cheapest product is surprisingly a post-paid product, Connect 100, at N$170.
"It is about 20% more expensive than Cell One's pre-paid and about 35.6% more expensive than Telecom's Switch time but it comes with a free handset in return," said Stork.
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