Cellular price hikes in SA: we were warned

furpile

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There is no problem with them raising prices, as long as it is for new contracts or upgrades only. Changing the contract price during a contract should not be allowed.
 

marine1

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There is no problem with them raising prices, as long as it is for new contracts or upgrades only. Changing the contract price during a contract should not be allowed.
Exactly. Wonder why the mafia can't understand this ......oh wait because then people will cancel.
Of this is not mafia style business what is ?????
 

JustinB

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Legal experts and other relevant parties have been asked. Apparently they are very busy currently and this is quite a complex issue, but they are looking into it and have promised to give us feedback.



On Vodacom: 26.5 million pre-paid, 4.9 million contract - http://businesstech.co.za/news/mobile/78965/vodacom-loses-subscribers-in-sa/
Thanks Jan

The MTR excuse doesn't hold water for contract subscriber increases. It is pure greed.

Lets calculate:
- 4.9M of their base are contracts,
- assuming the expiry/renewal period is spread evenly throughout the 24 months, lets assume then on average its 12 months til expiry/renewal.
- R10 or R20 increase (per contract per month), so lets average to R15

So 4.9M x R15 x 12 months = R882M p.a.

According to the article, R1B would be lost due to MTR - and now VC have just made that by increasing the contract price on 16% of their base???

OH wait... they also increased the price of prepaid didn't they?

Greedy greedy greedy.
 

marine1

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48,323
Thanks Jan

The MTR excuse doesn't hold water for contract subscriber increases. It is pure greed.

Lets calculate:
- 4.9M of their base are contracts,
- assuming the expiry/renewal period is spread evenly throughout the 24 months, lets assume then on average its 12 months til expiry/renewal.
- R10 or R20 increase (per contract per month), so lets average to R15

So 4.9M x R15 x 12 months = R882M p.a.

According to the article, R1B would be lost due to MTR - and now VC have just made that by increasing the contract price on 16% of their base???

OH wait... they also increased the price of prepaid didn't they?

Greedy greedy greedy.
Would love to hear their spin doctors explain this
 

Jan

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Something I have thought about, to get a contract the network needs to do an affordability study. This is based on your income and the cost of the package which you want. With the prices going up, does that mean that some people's contracts are no longer affordable? Do networks leave headroom in theor calculations for these increases?
This is something I've also wondered about and I have asked national credit act related questions. CPA and NCA stuff has more hope of seeing some kind of result, I reckon, because contract law stuff seems too complex and costly to be of any use.

The MTR excuse doesn't hold water for contract subscriber increases. It is pure greed.
Just to be clear: I'm not defending the price increase. Just adding information to the discussion I have that I think might be relevant.

It's not only the MTR situation that resulted in higher prices. Cell C does argue that it was a significant contributor, but neither it nor Vodacom says it was the only reason.

Both Vodacom and Cell C point to Eskom load shedding and rises in their input costs for causing them to have to hike prices.

Also: as far as I can tell, pre-paid prices have not gone up.
 

Valerion

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I also appreciate all the times that contract prices have been lowered by the providers when they lowered prepaid costs. Was a real winner back then.

/Oh wait ...
//We only pay increases on contract, never lower fees
///Were told "you locked yourself into a fixed-cost agreement"
 

JustinB

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Also: as far as I can tell, pre-paid prices have not gone up.
Ah right - i didn't realise.

But actually, this makes it worse... MTR effects both pre and post-paid. So contract subscribers are subsidising the "losses" they incurred on prepaid? Why...? Because we're (contract subscribers) are bound to a term contract!?!?

Edit: Meant to type MTR + load shedding + any other factors they're pointing to. I cannot think of a single factor that impacts contract subscribers alone.

Also - I didn't mean to imply you're supporting VC or Cell C. I'm just saying they're not answering the tough questions.
 

Jan

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I also appreciate all the times that contract prices have been lowered by the providers when they lowered prepaid costs. Was a real winner back then.

/Oh wait ...
:D

But actually, this makes it worse... MTR effects both pre and post-paid. So contract subscribers are subsidising the "losses" they incurred on prepaid? Why...? Because we're (contract subscribers) are bound to a term contract!?!?
Indeed. Hiking contract prices, or changing contracts to go from Top Up 130 to Top Up 140, is a sure-fire way to increase ARPU (average revenue per user - a key metric for telcos).

No doubt it's shady. And it'll be interesting to find out for sure how legal it is.

One thing I am convinced of: this wasn't done lightly. Vodacom and Cell C know that a move like this would erode people's trust in contracts and result in major consumer backlash.

That doesn't make the situation right, but it does have me wondering about the state of South Africa's telecommunications sector...
 

Insint

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Apr 6, 2010
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I was also thinking about this whole situation. If they want to play it this way then it needs to be stipulated on every advertisement that these prices could be changed in the 1 - 36 month period. It was advertised for me that my contract would be R180 x 24 and not R180 until we feel like changing it.

It's just wrong and this whole process just leaves a bad taste. What is the point in signing contract if the terms state that the contract can change whenever they feel like it?
 
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