Cellphone deals ‘too complex to decipher’

Right2Know marching against the high price of cellphones calls and SMSes. PICTURE: SIBUSISO NDLOVU

Right2Know marching against the high price of cellphones calls and SMSes. PICTURE: SIBUSISO NDLOVU

Published Aug 5, 2013



Pretoria - If choosing the best cellphone package for your needs leaves you dazed and confused, you are not alone.

Cellphone packages were so fiendishly difficult to decipher that “even the most sophisticated consumer cannot comprehend”, said Communications Department deputy director-general Themba Phiri.

And it is this complexity that is at the heart of a dispute over whether South Africans pay too much for their calls.

The latest comparative study of 46 African countries ranked South Africa 23rd on the price of the cheapest prepaid products. Another international study placed the country 117 out of 140. This was despite soaring revenues for mobile operators in a rapidly expanding market, and the largest economy in Africa, said Phiri.

MPs accused cellphone operators of “talking among themselves” to set prices.

But Vodacom spokesperson Richard Boorman said such studies did not compare apples with apples. They tended to look only at advertised tariffs, while the South African market was “quite different in the sense that we have an awful lot of promotional pricing”.

This offered far cheaper call rates during off-peak hours, with the aim of spreading the load on the network, and reducing congestion when traffic was high.

Vodacom’s average effective price per minute for prepaid was now about 65c. While this made it hard for cellphone users to pin down the rate they could expect to pay, “some level of complexity” was necessary.

Vodacom had been lowering prices consistently, even as its input costs rose, and it invested heavily – about R7-billion a year – in network infrastructure.

But Dr Alison Gillwald, executive director of Research ICT Africa, which conducted the comparative African study, said promotional packages were common “all over the world.


Boorman’s argument about South Africa being a “particular case” couldn’t be sustained, Gillwald argued.


Some of the South African cellphone companies’ operators in other countries offered much lower rates.

“The cheapest operator on the continent is probably MTN Ghana, where MTN operates in a very competitive market.”

Robert Madzonga, chief corporate service officer at MTN, said the research methodology had “little to do with the reality of the costs MTN consumers actually face”.

MTN had found that, in some instances, prices quoted by Research ICT Africa were 60 percent higher than the average MTN prepaid package, and almost 80 percent higher than its cheapest.

It also failed to take into account differences between “per-second and per-minute billing increments in its benchmarking”.

Per-minute billing typically resulted in 25 percent higher costs than per-second. A variation of this magnitude could account for 10 places in South Africa’s ranking, Madzonga said.

Phiri said the department was in discussions with telecoms regulator Icasa about forcing cellphone companies to make their price structures easy to understand. - Pretoria News

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