South Africa’s cellular tariff maze

South African consumers are faced with numerous mobile tariff plan options that aren’t easy enough to switch between, or particularly transparent.

That’s according to William Stucke, a councillor for the Independent Communications Authority of South Africa (ICASA), who was reporting to the Parliamentary Portfolio Committee on Communications about the high cost of communication in South Africa.

Stucke explained to the committee that there are around 5 pre-paid tariffs on average from each of the mobile network operators. If one includes contract packages there are over 75 tariff plans to choose from between South Africa’s 4 mobile operators.

“Is this providing the customers choice, or does this merely serve to confuse the customer?” Stucke asked the committee.

He then went on to answer his own question: “The fact that there are multiple tariff plans doesn’t help the typical pre-paid consumer.”

Stucke said that unlike post-paid and top-up subscribers, pre-paid customers buy a SIM card, they don’t buy a tariff plan. From there, switching tariff plans within an operator to take advantage of promotions is cumbersome.

William Stucke, taken by Rodney Jones at iWeek 2006

International calls cheaper than national ones?

Also among ICASA’s mobile voice tariff concerns, Stucke said, was the fact that international calls often had cheaper rates than national ones.

“All operators, with the exception of 8ta, offer cheaper international calls than local calls,” Stucke said.

“This is perhaps a function of the competition in international calls compared to national calls,” he noted.

Stucke showed the committee that operators have been making more money on their pre-paid products over the last two years despite the effective retail tariff dropping dramatically over the same period.

“Operators are making more money by selling their services more cheaply,” he argued.

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