To many consumers, our cellular networks appear hell-bent on losing friends and alienating custom.
Because penalising your customer for using your service is not only counter-intuitive, it’s on a par with the punitive manner in which Eskom treats its customers.
Dealing with a parastatal that has the monopoly on power is one thing: being able to change your cellular network to shop for a better deal is quite another.
A significant proportion of complaints I receive are cellular-related and most of those are about out-of-bundle rates.
Faulty devices can be replaced or repaired, dropped calls tolerated and “missing” data explained away, but why are we paying so much in South Africa for data compared to the rest of Africa?
Why is the service so appalling – not only signal, but service and call centres too?
Troy Martens’ letter to Icasa (Independent Communications Authority of SA) spells out the frustrations many consumers experience.
In April, she wrote: “I am extremely agitated by the unethical conduct of the cellular operators when it comes to the exorbitant cost of out-of-bundle data rates.
“It is not fair or justifiable that when people go out of bundle, the rates jump so exorbitantly. If a service can be offered at, for example the Vodacom rate of R149 for a gig of data, it cannot be justified that Vodacom can then charge R1 000 for that same gig out of bundle. That is a mark-up of 10 times.
“I am a busy person and it is unreasonable for the cellular operator to expect me to vigilantly monitor my data use.
“Last month, I used 12 gigs, the month before 7 gigs. The difference in bundle is R599 compared to out of bundle, which is R5 000.
“There is nothing wrong with incentivising people to use bundles, but it is unethical for normal data rates to be so unaffordable. It discriminates on consumers’ rights to communicate effectively and affordably.”
Another reader, Leanne Aliphon, says her husband has received a R3 700 bill for data on a line that was meant to be capped.
“My husband’s dispute is falling on deaf ears as MTN is adamant he has to pay the account.”
Over the years, consumers have been grumbling about these excessive costs, and pretty much told to “suck it up” because the infrastructure’s expensive and that’s the cost of technology.
Now, change might finally be afoot.
Last week, Parliament’s telecommunications and postal services committee took notice during the public hearings of the country’s cost of communication. Tbo Touch and his partner at Touch Central, Gareth Cliff, who recently launched their #DataMustFall campaign, were the last in line to speak about expensive data, calling data prices “daylight robbery”.
As an online radio station, they’re feeling the pinch because data costs are driving away their listeners. They’ve given network providers 30 days in which to drop prices or face the wrath of consumers.
Whether or not that’s a successful strategy remains to be seen (especially the sector of the market that’s unable to switch network providers without changing numbers), but the point needs to be made.
The high cost of data is stifling the economy and innovation, Stuff magazine editor Toby Shapshak told eNCA last week.
“I’m often asked why don’t we have a Silicon Valley in SA? The problem is: the kids who are most likely to come up with that idea in their twenties are more paranoid about running out of airtime than thinking up the next big idea. It’s time this anger Tbo has touched on becomes something worthwhile.”
With the chaos seen on university campuses, this campaign becomes even more critical. If students are unable to get to class, they could access textbooks online or take their classes through Skype, Tbo and Cliff say.
Why are data costs so high? Shapshak says it’s because there’s nothing stopping network providers from setting their price.
“There is no overbearing regulator that keeps the costs down. The networks have been able to arbitrarily inflate costs.
“We live in a world where voice use is plummeting, data use is growing, and it should be cheaper.
The networks are going to milk it for as much as they want. Telkom’s the exception.
“This segment of the market is ripe for disruption.”
In a statement on Thursday, Icasa spokesperson Paseka Maleka said data costs were significantly cheaper compared to 2010: down 45%, and consumers were buying data bundles because out-of-bundle rates were still high.
“Any regulatory intervention by the authority in any market must follow the prescripts of the law. In this regard, the authority’s analysis of priority markets which require regulatory intervention is under way. It hopes to announce the proposed steps it will embark upon by the end of the current financial year.
“A further area of concern relates to the expiry of prepaid data bundles (and post-paid). The authority believes this practice is to the prejudice of consumers.”
Yet the network providers insist they are doing what they can to cap prices in a competitive market.
MTN’s communications department did not respond by my deadline, but their head of corporate services, Graham de Vries, told Parliament they had decreased voice and data tariffs by 58% and 73% respectively in the past five years, despite an increase in costs due to the economy, and that more frequency would have a “significant effect” on costs.
Byron Kennedy, Vodacom’s spokesman, said: “Vodacom’s data strategy is predicated on four pillars: having the best network; getting a device into every customer’s hands; offering affordable value across all segments; and providing more reason to consume data through the provision of content.
“In 2015, we launched differently priced data bundles, contributing to the 85.9% increase in total data bundle sales to about R343 million. Our data traffic growth currently is at 40% for the 2015 and 2016 financial year.
“Therefore, usage patterns tell a different story and show our customers are consuming more data on our network because they derive more value from our data bundles.
“We welcome the investigation on data costs, and we will co-operate fully with Icasa.
“We believe greater access and the ability to rapidly deploy infrastructure will give South Africans faster speeds, wider access to LTE coverage and, inevitably, lower data prices, and enhance the dynamic character and functioning of the markets.
“This highlights the pressing need to resolve the current impasse on the allocation of spectrum.”
Jacqui O’Sullivan, Tel-kom’s spokeswoman, told me: “Telkom is committed to lowering the cost to communicate for all South Africans. We have endeavoured to provide high-quality products targeted at our consumers at reduced prices.
“This includes the launch of our game-changing product, FreeMe, which costs a third (R0.69c per MB) of what the next lowest operator is charging (R1.75 per MB). Our lowest in bundle rate (Sim Sonke) is (R0.29c per MB).
“Telkom FreeMe packages offer the same value for both prepaid and post-paid customers. We have seen demand for data increase substantially in South Africa, with mobile data volumes increasing by 72% over the past year.
“For the 2016 financial year, mobile data revenue was reported at R1.6 billion,” she said.
Telecommunications and Postal Services Minister Siya-bonga Cwele has instructed Icasa to investigate data costs and it’s now working with the National Consumer Commission on this, but the problem seems more complex than greedy network providers: the impasse over spectrums also needs to be resolved.
It’s about time. Hopefully, with added media attention and celebrity backing, this matter will be prioritised and not be turned into an open-ended investigation.
Yes: data must fall. And shouldn’t expire, either.
Shop around: If your network provider is becoming too expensive, shop around for a better deal. Telkom’s become very competitive. Compared to the other providers, their market share is small, but their prices are a fraction of the cost of others.
Options: Switching providers is not necessarily ideal – especially if you’re not on a contract and will lose your number. Using different devices or Sim cards might be a way to benefit from better deals.
Get a bundle: Buy bundles and monitor your usage. The network providers send alerts to your phone or other device alerting you to the fact that your data is about to be depleted. Ignore those at your peril.