South African cellphone users can finally start getting used to paying for the actual airtime they use now that the leading players are offering per-second billing on some (Vodacom, MTN and Cell-C) or all (Virgin) of their packages.
But this is only for cellphone calls to other cellphones or landlines. Where consumers call cellphones using Telkom landlines, they still pay in full for the first minute even if the call lasts just a few seconds.
The only Telkom users who qualify for per-second billing are those who use a package called Supreme Call, which requires customers to agree to spend at least R1 000 per month with Telkom. This has led to accusations that Telkom is anti-poor.
Supreme Call customers, for example, are billed 32c for a 10-second call from a fixed line to a cellphone. Poorer customers who cannot afford the R1 000 monthly package would be billed R1,89 for the same 10-second call.
Director of the Freedom of Expression Institute (FXI) Jane Duncan says it is “simply unjust for the benefits of per-second billing to be available to rich consumers only”.
“If one decodes the economics behind this package, it is clear that Telkom is loading the dice against poor telephone users. Its economic rationale is inherently anti-poor, anti-working class and anti-unemployed,” says Duncan.
“Far from benefiting poor consumers, which per-second billing should do, Telkom has performed a sleight of hand and turned it into an instrument to ensure that the poor cross-subsidise the rich.”
James Hodge of Genesis Analytics says Telkom’s Supreme Call package is not really an option for most fixed-line customers due to the R1 000 monthly guaranteed spend.
A Telkom spokesperson told the Mail & Guardian that Supreme Call was not its only per-second billing package.
“All of our calls are billed per second, but with Supreme Call there is no minimum charge so it is pure per-second billing,” said the spokesperson.
Telkom said the Supreme Call package is not geared towards residential consumers. It suggested that its Closer packages, which do not offer per-second billing, are more suitable.
Telkom’s managing executive for retail marketing, Steven Hayward, says the Supreme Call targets small business. Residential customers could use the Closer package, which is also not based on per-second billing.
This package allows residential customers to choose between three options so they can customise their package to their fixed-line needs. The packages are geared towards people who use their phone during the day or people who want to make lengthy calls during Callmore time.
“The Telkom Closer package is a more lucrative calling plan for the consumer and it provides greater value to our residential customers, especially with the Closer Plan 3 because the customer receives an additional 1 000 free minutes during standard time,” says Hayward.
But an independent analysis suggests consumers have to be careful in selecting these packages as they can be more expensive than standard offerings.
Robert Lipschitz of Genesis Analytics says it has just completed analysis of Telkom’s Closer packages which show that Closer Plan 3 is more expensive than Telkom’s standard package when using average calling telephone use pattern benchmarks measured by the Organisation for Economic Cooperation and Development (OECD).
The OECD is an international organisation helping governments tackle the economic, social and governance challenges of a globalised economy.
Lipschitz says the analysis takes standard internationally accepted calling patterns and applies them to Telkom’s packages in order to work out an average monthly cost to a consumer.
He says Telkom’s standard package worked out at R290 per month while the Closer 3 package worked out at R345 per month.
When asked by the M&G to comment on how their package structures discriminated against the poor, Telkom chose to focus their response on their Closer offering.
“Although Telkom Closer is not a pure per-second billing package, it does offer huge savings to the customer. The package offers three options based on the customers’ usage. The Telkom Closer packages vary from R120 to R145 and R300 per month including line rental and call answer,” said a Telkom spokesperson.