Mobile myth busters
THE MOBILE OPERATORS are out to confuse you with choice, effectively steal your free minutes and trick you into spending more than you plan to. So beware. That’s the advice to consumers from Arthur Goldstuck and Steven Ambrose in their recently released pocket handbook How to buy a cellphone in South Africa.
Goldstuck and Ambrose accuse the industry of a divide-and-rule strategy disguised as an attempt to give consumers choice. "Here it is not about dividing up the market among the competition but rather dividing up your choices into such a wide range that it becomes almost impossible to negotiate the best possible deal for yourself."
Their advice isn’t rocket science. And the industry practices they warn against aren’t entirely unique to SA. However, they pull together solid guidelines aimed at helping consumers decide how to choose the right tariff package and cellphone for themselves. They do that by identifying potential pitfalls that enable the mobile operators to make more money out of unsuspecting consumers who haven’t analysed their true needs.
For example, the concept of the "broken minute". The authors say that roughly 40% of every 60 seconds that users pay for is wasted because, on average, most calls are shorter than 60 seconds. They recommend choosing per-second billing in almost all instances, though they do warn that the per-second rate can work out more expensive than a per-minute rate if used incorrectly. They also warn that not all per-second billing is truly that: you often first pay for a full minute and are only billed on a per-second basis thereafter.
Goldstuck and Ambrose focus largely on the contract customer, warning that low entry costs often camouflage high ongoing costs that the operators put in place to earn annuity income. "The simple truth is that you always get what you pay for, and no more – but sometimes less!"
A contract with "free" phone advertised at R99/month could omit to mention the fact that the user also has to pay for "extras" such as caller line identity and mandatory itemised billing. "The networks require you to pay for services you may not need, whether you want them or not, and at a price that bears no relation to the cost of providing the services." The R99/month could also only apply for the first nine or 12 months and not the full 24-month period.
Also, if you’re allocated "free" minutes as part of the contract bundle, check whether those can be rolled over to the following month. However, in most cases the principle is one of "use it or lose it". "This is a legalised form of theft, as the network is in effect stealing your ‘free’ minutes," say Goldstuck and Ambrose.
Though the contract might appear to be attractively priced, the airtime profile might not suit a consumer’s needs, resulting in their paying more for minutes used outside of their included bundle and wasting the "free" ones.
The bottom line is: read the fine print. And assess when you make most of your calls, otherwise known as your "airtime profile".
The authors also point to the concept of "on-" and "off-net" calls – for example, from Vodacom to Vodacom or from Vodacom to Telkom – explaining that it’s due to the high cost of interconnecting from one mobile network to the next that off-net calls are so much more expensive.
They encourage consumers to write to regulator Icasa and/or the Department of Communications to protest against the high cost of cellphone interconnections.
For consumers with access to a cellphone and a landline, Goldstuck and Ambrose recommend some general guidelines. First, use a Telkom line when calling another Telkom line. When calling someone on the same mobile network, use your cellphone (though beware that someone could have ported to another network and kept their old number, so you could be paying more than you think to make the call). When phoning someone on a different mobile network use your Telkom line (as long as the cost on your package is higher than Telkom’s R1,89 peak and R1,17 off-peak rates).
Goldstuck and Ambrose also dispel the advertised myth that the mobile operators want to reward consumers for their loyalty. In almost every case, they say, it’s to a consumer’s advantage to take out a new contract rather than to renew an existing one.
And as for loyalty programmes, those are mostly there to "generate higher spending rather than reward existing spending". Goldstuck and Ambrose use the example of Vodacom’s Talking Points, where the consumer earns points to qualify for rewards.
However, to reach the 150 points required for a free SMS bundle or 10% airtime discount on on-net calls they calculate the pre-paid user would have to spend R1 550 on recharge vouchers. To get the 1 000 points needed for a basic free phone, you’d need to spend R10 000 on airtime.
Finweek
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