'Data contracts are broken'
New players have entered the mobile connectivity market in the last few years, including Sentech (who soon self-destructed), iBurst, Neotel, Telkom and several WiFi network providers. For the truly mobile worker however, a 3G modem with a cellular operator remains the only viable option for (almost) anywhere connectivity. Used either as the main method of connecting, or as an alternative when not using corporate networks or WiFi, 3G is an invaluable service to most mobile workers.
Five years ago most people were more than happy to commit to 24 month 3G data contracts. The reason is because it was the only reliable connectivity option available that also had geographic reach and added a whole new ingredient to the work mobility recipe. With limited options, locking into a 2 year agreement felt reasonable at the time.
As mobile offerings increased and more ad-hoc users started using 3G, the inflexibility of long-term 3G contracts became obvious. Furthermore, networks failed to implement billing systems that could reliably keep track of 3G data use. MTN last week even publicly admitted its data billing woes. Without a way to accurately monitor usage, many 3G users are regularly bitten by ludicrous out-of-bundle rates of up to R2 per MB.
As mobile services matured, networks started offering pre-paid 3G. Problem solved? Not so fast.
If you have ever tried to regularly use pre-paid 3G you’d know that even the tech-literate finds this process complicated. In short, it involves buying a SIM card, doing RICA registration, and activating the SIM. Then one has to pop it into a normal phone, buy airtime and transfer it onto the SIM. The airtime then needs to be manually converted into a data bundle using a sequence of menu items, before being placed into the 3G modem. This needs to be repeated every time a bundle runs out. It’s just not practical.
Despite the drawbacks of 24-month contracts many users and especially companies still opt for locked-in contracts. Horror stories abound about new employees who happily use their company issued 3G cards for a month or two, before realising that they had used thousands of Rands worth of out-of-bundle bandwidth. Companies are also experiencing wastage as data contracts often continue way beyond employees’ employment. Managing employees’ 3G use has become a particular problem for companies.
Bottom line is that the 24 month data contract is broken.
Some users are still lured by the promise of a “free” 3G modem, for which we all know they pay off over the course of the agreement. 3G modem costs have in reality dropped significantly to around the R900 mark, making modem financing irrelevant.
Mobile connectivity options should be based on simplicity, flexibility and freedom of choice. Hence, stay away from the 24 month contract.
Mobile data contracts broken? Give your views
Hein Koen is co-founder of Flickswitch
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