Mobile data users losing out

One of the biggest gripes from mobile data users is the absence of monthly bandwidth rollover.  Unlike prepaid airtime – which can be used up over a few months – mobile data bundles have a limited one-month lifetime.

The limited lifespan of both prepaid and post paid data packages means that users are effectively forced to consume the full data bundle – typically 500 MB, 1 GB or 2 GB – in a month.  There is however a catch:  it is near impossible for data bundle subscribers to know exactly when they have used their allotted bandwidth.

If consumers use less than their monthly allowance, their cellular provider cashes in on unused bandwidth.  If they use more than their monthly cap they get hit by high out-of-bundle rates.  Vodacom, MTN and Cell C score in both cases.

Difficult to measure exactly

The current billing and measuring systems used by the cellular operators means that it is not possible for mobile data subscribers, especially post-paid subscribers, to ensure that they use exactly their monthly usage allowance. 

“At the moment, we are not able to ensure that customers use exactly the amount of bundled data they paid for,” Cell C confirms.  MTN said that they do offer a bill limit, but pointed out that there could be measurement delays in a post paid environment.

Vodacom said that prepaid data bundle customers can ensure that they use exactly the amount of data they purchased, and that they are currently working on the implementation of a real-time billing mechanism for post paid billed data.

Another problem is the immediacy of the usage measurements.  MTN and Vodacom’s usage measurement is not done in real time, and with HSDPA speeds of up to 3.6 Mbps users can clock up as much as 400 MB usage in 15 minutes.

The fact that out-of-bundle data rates are significantly higher than in-bundle rates means that mobile broadband users must be very careful about exceeding their monthly usage limit.

While the in-bundle rate for a 2 GB package is around 19c per MB, the out-of-bundle rate is R 1.20.  This means that exceeding your monthly usage limit by a mere 400 MB more than doubles your monthly data bill.

Post-paid users also don’t have the option to cut off their usage after their monthly cap is reached – a system typically associated with capped broadband environments.

Vodacom does currently offer an SMS notification service warning users when they have used 50%, 80% and 100% of their data bundle, a step towards limiting the potential damage to a subscriber’s monthly data bill.

MTN said that they are also looking at an SNS solution while Cell C advises subscribers to use their balance enquire service or contact the call centre to keep abreast of their usage.

Out of bundle rates under fire

The cost of out-of-bundle data also came under the spotlight after Neotel announced that their out-of-bundle data price is 8 c per MB, significantly lower than the cellular providers’ R 1.20 (R 2.00 if no bundle is purchased). 

Since Neotel – like Vodacom, MTN and Cell C – are using a cellular technology (CDMA) to provide data and voice services to consumers it raised questions about the per-MB data rates from the incumbent cellular operators.

Even Virgin Mobile’s flat rate of 50 c per MB for data – which is purchased from Cell C – shows up the more established operators.

All three cellular operators were asked why their out-of-bundle rates are so much more expensive than in-bundle rates, and all three providers basically said that better prices can be offered when subscribers commit to higher volumes of bandwidth.

It is understandable that it can be complicated to develop and implement new billing and measurement systems.  In the interim it may however be a sign of good faith on the side of Vodacom, MTN and Cell C to charge in bundle rates for out-of-bundle usage of data until such time as they can provide their subscribers with a way to ensure that they can use exactly the amount of data they paid for.

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Mobile data users losing out