Whichever way one looks at it, South Africans are being cheated by their cellular network providers, says a new guide to cellphones and contracts. A “free” phone is never really free, 40% of subscribers’ “free” minutes go unused and loyalty programmes simply generate more spending rather than reward the customer.
The booklet, titled How to Buy a Cellphone in South Africa: The Essential Practical Guide and co-authored by Steven Ambrose and Arthur Goldstuck, alerts consumers to the traps and tricks of the industry.
“You cannot compare one bundle from one network with any bundle from any other network,” says Ambrose, head of the strategy division of World Wide Worx, which researches cellular and mobile trends in South Africa. “The result is that we often end up paying too much for a service we really don’t understand, or we only partly use some of the features for which we almost certainly have paid.”
Goldstuck, MD of World Wide Worx, said that when he and Ambrose were looking at mobile trends for a research project this year, they found that there was “major confusion and dissatisfaction around the complexities of choosing your phone”.
“There is an obvious need [for the book] out there,” he said.
The top three ways in which consumers can take back “some level of control” over their cellphone bills are by watching out for the “broken minute”, making sure their “free” minutes do not become “stolen minutes” and by trying to get all their family members on the same network, says Goldstuck.
A broken minute, as described in the 60-page booklet, is the portion of a minute that is lost to the customer but gained by the network as profit that has, in reality, not been earned. In other words, even if one talks for three seconds, which could cost about 21 cents, one will pay for the full minute — about R2,50 (the guide uses average prices across networks at the time of publication).
And even if one arranges per-second billing, the guide warns customers to check that it truly is per second. “In some cases, the per-second billing only starts after the first minute of talk time. So, in effect, you pay for 60 seconds up front, and then per second thereafter,” it reads.
Goldstuck said it’s important to be conscious of one’s free minutes and use them up, otherwise one is technically being robbed.
A chapter titled “Behind the bundle” reads: “If you are allocated free minutes and you don’t use them, in many cases you are limited in carrying them over to the next month. This is a legalised form of theft, as the network is in effect stealing your ‘free’ minutes.”
It continues: “You can bet that the networks have a clear picture of what minutes are not used and when. These are often the types that are most freely offered to make the bundles look as attractive as possible.”
When making a phone call from one network to another (say from a Cell C number to an MTN phone), a caller pays an interconnect fee of about R1,25. These “off-net” calls are where networks make most of their money, said Goldstuck.
“It gives them a massive injection of cash upfront from customers, resulting in strong cash flow and a healthy flow of interest payments from their cash holdings,” the guide explains.
It has now become more difficult to identify off-net calls because mobile number portability (MNP) allows subscribers to change networks and keep their old number — which usually told others to which network a subscriber belonged.
To counter this, Goldstuck says families (and the people one phones most frequently) should try to stay on the same network because such calls are much cheaper.
The guide also tells readers how to work out their own “airtime profile”, which is the starting point for understanding what type of phone or contract is right for what type of user. It then guides users in choosing the right package, understanding their contracts, selecting a cellphone with the features they really need, using a cellphone instead of a landline, and choosing a phone for children.
How to Buy a Cellphone in South Africa: The Essential Practical Guide is available at most major bookshops