The Advertising Appeals Committee (AAC) has dismissed an appeal by MTN South Africa over its advertising of a “free-to-use” router in its Shesh@600 home internet package, upholding a ruling that found the claim to be misleading.
The appeal followed a complaint lodged by a consumer, which was partially upheld by the Advertising Regulatory Board’s (ARB) directorate last year.
While the directorate cleared MTN on issues relating to VAT disclosure and pro-rata billing, it ruled that the “free-to-use” router claim contravened the Code of Advertising Practice because it failed to disclose potential additional costs.
The advertising campaign promoted MTN’s Shesh@600 5G/LTE home internet package, which offers uncapped data with tiered speeds for a monthly fee of R399.
The offer appeared on MTN’s website and an online publication advertorial, prominently featuring claims such as “R399 month-to-month” and “free-to-use router”.
According to the AAC, the consumer argued that despite the router being advertised as free, he was required to make an upfront payment of R553 before activation.
It notes that MTN later explained that the amount related to activation and account adjustments, but the complainant said this contradicted the “free” claim.
In its original ruling, the directorate found that the advertising omitted material information about additional, mandatory costs that may be associated with the router.
It concluded that this omission was likely to create a misleading impression for consumers and instructed MTN to remove or amend the “free-to-use” claims.
MTN appealed this finding, arguing that no fee was charged for the router itself and that the complainant’s invoices reflected a zero cost for the device.
The company maintained that any upfront payments were unrelated to the router and that, in this specific case, no SIM activation fee had been levied.
During the appeal process, MTN acknowledged that a SIM activation fee of up to R150 may be charged by MTN stores or authorised dealers for in-store sign-ups.
The fee, described as a dealer administration charge, is payable at the point-of-sale and does not appear on MTN billing invoices. MTN argued that this fee was discretionary, not always charged, and not directly related to the router.
However, the AAC rejected this distinction, finding that from the perspective of a reasonable consumer, a router that requires a SIM card cannot be considered “free-to-use” if a once-off activation fee may be payable in order to make it operational.
The committee said such a fee forms part of the practical cost of using the router, even if it is not charged in all cases.
The committee also found that MTN’s reliance on general “Ts & Cs apply” links was insufficient. Consumers, it said, should not be expected to search through layers of terms and conditions to discover that a product advertised as “free” may carry an activation-related cost in certain channels.
In its final decision, the AAC agreed with the directorate that the unqualified “free-to-use” claim breached clauses of the code governing misleading advertising and the use of the word “free”. It ruled that disclosure at the point-of-sale does not cure a misleading impression created by the advertising itself.
As a result, the appeal was dismissed and MTN has been directed to implement the directorate’s sanction by removing or appropriately amending all “free-to-use” router claims to clearly alert prospective customers to any potential activation costs.
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