MTN says increasing the price data contract subscribers pay by over 20%, without the option to cancel, is in line with their “treat customers fairly” policy.
Many MTN contract customers received an unpleasant surprise in May when they discovered their monthly bills increased by up to 28%.
MTN SA chief consumer officer Mapula Bodibe said their tariffs increased by an average of 5%. However, many customers now have to pay between 22% and 28% more.
The reason for very high increases, MTN explained, is that the increase was applied to the “base plan” and not the price customers pay.
Customers who purchased these packages had no idea they were signing up for a discounted product that was multiple times more expensive than what they paid.
MTN applies a discount to the base plan to make the packages competitive.
For example, instead of paying R1,089 for 20GB of data (the base plan), the customer sees a price of R199. MTN applies a discount of R890, reducing the advertised price and the amount that appears on customer bills.
However, MTN applied its latest increase to the R1,089 and not the price subscribers pay.
The R1,089 is nowhere to be seen on the bill, and customers are not warned about it. Not even MTN’s customer service agents knew about it.
When customers are suddenly hit with a 28% price increase, they simply have to accept it. MTN made it clear that they are not allowed to cancel their contract.
The table below explains why MTN contract subscribers now pay up to 28% more for their service, while MTN claims it only increased prices by 5%.
|Base price that users do not see|
|Price Plan||Old Price||New Price||Advertised price increase|
|My MTNChoice 20GB||R1,089||R1,145||5%|
|My MTNChoice 30GB||R1,299||R1,365||5%|
|Real price that appears on users’ bills|
|Price Plan||Old Price||New Price||True price increase|
|My MTNChoice 20GB||R199||R255||28%|
|My MTNChoice 30GB||R299||R365||22%|
MTN Treating Customers Fairly Policy
MTN could easily solve the problem by applying the 5% increase to the discount as well, but the company decided not to do this.
It raises the question of whether this decision, which leaves its customers with bill shock, uncertainty, and unhappiness, is in line with the company’s ‘Treating Customers Fairly’ policy.
The policy aims to ensure customers achieve fair outcomes from MTN and that their relationship of trust with the company is maintained and enhanced well into the future.
MTN SA’s executive for corporate affairs, Jacqui O’Sullivan, confirmed that they think they treated customers fairly in this case.
“Whilst we could have communicated more clearly how the increase would apply to the base plans, we have offered our customers upfront discounts on the plans in an effort to make it as affordable as possible for them,” she said.
“It is important to note that all terms and conditions will remain the same, and there won’t be any changes to the current discounts.”
Increasing data prices after spectrum auction
MTN has regularly stated that data prices will significantly reduce if they get more spectrum.
As a result, many MTN subscribers were surprised to see their data bill increase after industry regulator Icasa concluded its long-awaited spectrum auction.
O’Sullivan confirmed that MTN has said the release of spectrum would result in lower data prices and that they maintain this position.
“While the permanent spectrum has not yet been allocated, we need only look at how operators have used the assignment of temporary spectrum as a blueprint of MTN’s plans with the new allocation,” she said.
“With the temporary spectrum, MTN has been able to continue expanding and enhancing our world-class network, we’ve been able to bring more people online, and we have been able to reduce prices.”
She added that they have zero-rated more than 1,000 health and education websites serving more than five million people each month.
“In the past year, we dropped the effective price of data by more than 30%,” O’Sullivan said.
She highlighted that MTN had not adjusted subscription prices over the past two years despite the challenging economic environment caused by Covid-19.
“On the other hand, we have made substantial investments into our network to ensure our customers enjoy world-class connectivity,” she said.
“MTN will continue to deliver the best possible experience and service with products that add value to our customers.”