A mobile price war has erupted in Mozambique as Vodacom has announced a second sharp cut in two months of call rates in that country, following the launch of Movitel in that country this week.

Movitel announced the lowest rates for prepaid mobile calls on Tuesday as it unveiled its services in that country: a move that shook Mozambique's telecommunications sector. Its prepaid per minute calling rates have been set at about 4 Meticais per minue.

But starting Friday, Vodacom Mozambique plans dropping its rates from 5 Meticais per minute to 3.6 Meticais per minute for prepaid calls, according to the telco’s commercial and strategy director, Junaid Munshi,

“We are going to surpass competition, and the new tariff is for mobile operators and landline phones," said Munshi.

Vodacom is the third mobile phone operator in Mozambique, after the Mozambique's state controlled MCel and Movitel.

Movitel is a consortium between the Vietnamese group Viettel (which is wholly owned by the Vietnamese Defence Ministry) and SPI, the holding company of Mozambique's ruling Frelimo Party. Viettel owns 70% of Movitel.