South African mobile operators have been slammed for lacking transparency in their prepaid options, placing unsuspecting subscribers, by default, on high price rates, with little communication as to how to move onto the better-marketed - and better-priced - deals.
Unlike the contract or post-paid options offered by the operators, prepaid consumers have no options as to which prepaid package they are signed up to when they purchase a SIM card.
Heidi Gouws, national sales manager of telecommunications expense analysis company DataRoom, explains that often, prepaid consumers are completely unaware of what they are purchasing. Or rather they assume they are being placed on the latest marketed deal from the operator.
A case in point is Vodacom, which recently fired back at mobile newcomer 8ta's prepaid deal by unveiling a prepaid package offering tariffs of R1.40, billed per-minute, effectively making this the cheapest prepaid option on the market.
What the operator did not communicate to potential subscribers is that the unsuspecting consumer, who goes out to purchase a Vodacom prepaid SIM card to access the cheap rate, will automatically be placed on its Yebo4Less package, on a default tariff of R2.60 peak.
Thereafter, the subscriber is responsible for contacting Vodacom to migrate to a better priced prepaid plan. Vodacom has six different prepaid packages.
MTN is no better, with new prepaid customers being signed up on a default rate of R2.89 per minute during peak times. However, cheaper rates, such as R1.75 per minute/per second, on different packages are available from the operator, which offers four different prepaid options.
Cell C has a flat rate of R1.50 per minute and prepaid consumers are placed on this rate by default. However, the widely-preferred per-second billing option must be specifically requested. Cell C has four different prepaid options and subscribers are allowed to change their package once, free of charge, but must pay for any subsequent changes.
All three operators have admitted to signing new prepaid subscribers onto their respective default rates.
Key to 8ta's strategy was to offer simplicity, the mobile arm of Telkom announced, and it is, therefore, the only operator that offers one prepaid offering, at a flat rate of R1.50. But it too was criticised for lacking transparency, as consumers were only later made aware that the rate was on per-minute billing only.
Call for legislation
Gouws describes the lack of transparency from the operators regarding their prepaid packages as “shocking”.
Gouws explains that, while choice is good for competition, the issues of default rates and the responsibility on the consumer to change between packages is not well communicated and amounts to lying by omission.
To prevent further consumer exploitation, Gouws calls for legislation to be drafted that will force operators to communicate more extensively about how their prepaid packages are designed, especially regarding the various pricing structures involved in each deal.
Meanwhile, the operators are continuing to market their prepaid deals, which have been criticised as being paramount to false advertising.
False advertising?
Corne Koch, communications manager at the Advertising Standards Authority, explains that often the operators' adverts are accompanied with a “terms and conditions apply” statement.
However, she says, if consumers feel the terms and conditions have not been well communicated, or that they have been misled by the advert, they should lodge a complaint with the authority.
Unfortunately, she explains, the authority is reactive and can only instigate an investigation based on a complaint. Thus she suggests that consumers read and sign the terms and conditions and, if this is not afforded to them, to take the necessary action.
Related story:
Mixed bag of cellular rates
Share