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Gratuitous customer iBuse

There's a catch to iBurst's new pricing structure for its wireless broadband service.

iBurst recently announced a new pricing structure for its >wireless broadband service, but customers who wish to take advantage of lower prices had better brace themselves to be charged for the privilege. The call centre might as well have a friendly voice saying: "iBend over and prepare to be iBused."

The alternative to paying a downgrade penalty or requesting an "upgrade", which buys more data for the same price, is to remain on their existing package, at a considerably higher price than comparable new packages.

Another surprise waiting for customers is that instead of being capped, as in the past, they will now automatically be charged 95c/MB if they exceed their monthly ration, compared to the price per megabyte on a 3GB package of 15c. Unless you keep a close eye on your usage, you won't even know about it. Accidentally go over your limit by 15%, and your monthly fee is doubled.

The new product pricing came into effect on 1 April 2008, but existing customers who didn't keep an eye on the media were not informed. It does appear on the iBurst Web site, but not under "latest news", which continues to point to the happy-happy-don't-be-sad e-mail the CEO sent to his staff in January. Customers were not informed that default behaviour for reaching the cap has changed either, and the option to opt out of a pay-per-use "service" you never opted in for is hidden deep in the iBurst Web site.

The company's CEO, Alan Knott-Craig Jr, describes the offering as a new product range, rather than new prices for existing bundles. The old packages were changed in March 2007, and customers were automatically given a small addition to their monthly cap for no extra charge. For example, 1GB customers would get 1.5GB for the same price; 3GB packages would offer 3.5GB.

Most resellers continued to describe the packages by their original size, with, for example, "+ 500MB free!" added.

The new packages go back to the original sizes, namely 10MB, 40MB, 500MB, 1GB, 3GB, 5GB and 10GB, but at much lower rates. The 3GB package, for example, which used to cost R599 per month and had 500MB added last year, will now revert to 3GB, at a price of R449.

Knott-Craig, however, says, "there is no like for like" between packages. He confirms that customers will be charged R99 to "downgrade" their existing package. This appears to be a hasty reduction from the R199 that prompted outrage on Internet forums. Upgrades, by contrast, attract no extra charge. It should be noted that the term "upgrade" or "downgrade", in iBurst vocabulary, refers to the price, not the package. So if you want to pay less, pay up.

Assuming customers are stupid

Punishment

One might argue that the downgrade fee is an "incentive" to upgrade instead, but most customers would consider it a penalty for refusing to upgrade. Ivo Vegter, contributor, ITWeb

By way of example, someone who used to have a 3GB package for R599 per month, and was automatically upgraded to 3.5GB at the same price, can request to be migrated to a 5GB for the identical R599 – this does not happen automatically – or pay the penalty for downgrading to 3GB at R449 per month. They pay the penalty for a downgrade even though they never requested the upgrade that caused it.

According to Knott-Craig, a new customer who gets 5GB for R599 a month is not paying the same price for a better service as an existing customer who does not migrate, but remains on 3.5GB, for exactly R599 a month. In short, iBurst appears to assume customers can't count. Besides being stupid, most won't even notice they're being ripped off anyway if they don't receive a personal notice of the changes.

The downgrade fee policy has always been in place, Knott-Craig adds, although the fee had been R171 before April this year. True, sticking someone up and demanding only half the cash in their wallet is better than robbing them of the lot.

In fairness to iBurst, it isn't unusual for South African service providers to charge customers for downgrading their packages to a cheaper option. Some cellular operators are in the same extortion racket, charging a fee for exactly nothing, to punish customers from taking advantage of price decreases. Imagine a supermarket advertising: "Prices have been slashed! But only for customers who first pay an arbitrary extra fee. Come on, we know you don't want to mission across the road."

One might argue that the downgrade fee is an "incentive" to upgrade instead, but most customers would consider it a penalty for refusing to upgrade. Moreover, since new customers qualify for the new pricing without penalty, they will feel they're being punished for their loyalty.

This is, quite simply, disgraceful conduct. To those customers who are in a position to switch service providers, I'd say switch. Don't even think about requesting the upgrade, or giving in to the extortionate "downgrade" demand. Even if you switch to Telkom, it is a comparative amateur at abusing its customers.

Disclaimer: Ivo Vegter is iBurst's bitch. Upon discovering the pricing changes, two weeks after they were "announced", he requested a migration form, but has yet to receive it. He has also not had the surprise about the "downgrade" fee sprung on him. He does not usually write about personal service complaints, but as a journalist has a responsibility to warn unsuspecting victims of outrageous scams and outright extortion.

 


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