MTN's new month-to-month contracts: cheaper than prepaid, but 30% pricier than normal contracts

Business Insider SA
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  • MTN has launched a new option to take up SIM-only contracts on a month-to-month basis.
  • The service provider says these are designed to give customers greater control of their spending commitments.
  • But the added flexibility comes at a significant premium compared to the traditional 24 month contracts - and it's not much cheaper than their prepaid option.
  • For more stories visit Business Insider South Africa.

MTN has launched a contract-free option for new and existing clients who don’t want to be locked into their more traditional 24-month deals. 

The service provider says these month-to-month contracts are designed with “freelancers, entrepreneurs, independent contractors and part-time temporary workers, who live from contract to contract, in mind” - and to give customers greater control of their expenses.

It presumably also allows deal-hunting users to change between various MTN options, and even port to more competitive service providers, without the onerous consequences of breaking a two-year contract.

It will also be significantly easier to apply for than traditional contracts - the month-to-month contracts require no credit checks, have no minimum requirements, and do not need customers to submit “complicated paperwork”.

To apply for a month-to-month contract, customers will simply need to provide their name, South African ID, and debit order details - should they wish to pay via a debit order. It’s also possible to pay for the month-to-month contract in cash, EFT, credit card, or debit card.

“These are uncertain times for many, so with this product we are responding to our customer’s needs with greater flexibility, as not everyone can afford the commitment of a fixed contract,” says Jacqui O’Sullivan, Executive Head: Corporate Affairs, MTN South Africa.

Although O’Sullivan says the new offering was developed to “help alleviate some of the pressure being felt by so many right now”, they come at a significant premium to their traditional fixed-length contracts.

A spokesperson confirmed to Business Insider South Africa that month-to-month contracts are priced at a 30% premium compared to the group’s 24-month contract prices - and they're available across most existing packages.

This means, for example, that MTN’s Made for Me Small contract - which includes 1GB of off-peak data, 1GB of anytime data, 100 anytime minutes, and 100 SMSs - will cost R258.7 - or R59.70 more than the contract offering.

A direct comparison of MTN’s month-to-month contract to its PayAsYouGo option is complex - due mainly to differences in data validity, and peak and off-peak call rates. 

Building the MTN’s Made for Me Small contract on a prepaid offering would require the purchasing of bundles - and purchasing premium-priced "anytime" data.

But assuming you want to use 1GB of data during normal waking hours, in this scenario, you could conceivably purchase 1GB of anytime data (R99), a 100 minute anytime voice bundle (R135), and 100 SMSs (R30) to a total cost of R264 - excluding any deals or promotions.

The R5.30 saving on the month-to-month contract, plus the added off-peak data, might be enticing for some - but the ability to customise a prepaid package - and, for example, remove the largely obsolete SMS package - might in fact be a more flexible and cost-effective option for others.

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