Judging by the response to last week’s column, Save money with the right cellphone contract, there are a lot of confused South Africans. And the multitude of new contracts being introduced by network operators intent on simplifying their offers (read: matching the value and simplicity introduced by Cell C), is only adding to the confusion.
Most of the tips from last week’s column were discussed in detail (keep you number, find the right contract, add bundles, switch to top-up), but comparing the same phone on different contract options from the four networks (or five if you count Virgin Mobile), is a major exercise.
Face it, most of us pick the phone we want first and then try shoehorn it into a contract we can afford. This is probably the worst way to select a contract, as you often end up with a phone that’s too “expensive” for the contract you can afford and then end up paying in, and on a contract with prohibitively pricey rates.
But beyond choosing a phone and comparing a handful of options on your current network provider, you should be comparing different options across networks. And, crucially, spend time researching special offers available in the market. Vodacom, Cell C and 8.ta run monthly specials, while MTN has offers available fortnightly.
To illustrate the value of comparing across networks, here’s a look at the different special offers available for Samsung’s new flagship smartphone, the Galaxy S III.
Vodacom has the S III on its new Smart Light contract for R329 per month (Valid until October 6). This offers 75 off-peak minutes per month, 20 anytime Vodacom-to-Vodacom minutes, 100 SMSes and 100MB of data. The per minute billing means the Smart Light contract is anything but smart (the other smart price plans do offer value).
MTN is offering the Galaxy S III on its AnyTime 350 contract at R499 per month (until September 30). This has R350 of airtime value, 50 SMSes, 75MB of data per month.
Cell C’s S III offer is R429 per month on its Straight Up 100 contract, which is bundled with 100 minutes, 100 SMSes (or MMSes) and 100MB of data. This is also valid until the end of September.
8.ta’s S III offer is on its Contract 3 for R438 per month. This contract has 60 bundled minutes (to other networks), 230 minutes to other 8.ta numbers or to Telkom landlines, and 25MB of data per month.
Virgin Mobile has the S III on its Classic 300 contract. R300 a month gets you R100 of anytime airtime, 50MB of data and 50 SMSes.
The comparison table below, compares the five different special offers mentioned above. Green-shaded cells are the best value (among those on offer), while red cells are the most expensive (or least value).
The trickiest comparison is the out-of-bundle rates. MTN’s are downright punitive, especially in off-peak times. Vodacom tries to sugarcoat its peak rates, buy offering a lower on-network rate (for calls to Vodacom numbers). Its out-peak rates are competitive (as are 8.ta’s), but the peak rates mean these contracts will be far pricier than others.
Be very, very wary of the out-of-bundle rates. These will mean you’ll end up spending hundreds of rands more on your phone contract every month, especially if you’re on a contract that is too “low” for your usage.
Also, this comparison shows that the cheapest contract (per month) is not necessarily the best value. Ironically, the most expensive contract also offers some of the least value.
It’s important to note that these aren’t the only contracts the S III is available on. These are the promotions currently being run by operators. The same is (obviously) applicable to any other phone and this is the crucial distinction. Use the special offers available to your advantage.
Compare, compare, compare!
Also, Vodacom and MTN are reworking and simplifying their contract offers, so expect to see this table look very different in a few months time.
Finally, the fact that three out of the five networks are trying to force customers on to per minute billing in 2012 is disgraceful. The network operators are counting on you to use only a fraction of a minute (or 1.5 minutes, for example), so that they score with the rounding up. There are very clever actuaries working this out at the networks. Per minute billing is nothing but to your disadvantage. Therefore, the choice (based on these five special contract offers) is really between two network operators.
And the winner is rather obvious.
*Hilton Tarrant contributes to “Broadband”, a column on Moneyweb covering the ICT sector in South Africa.