Despite local authorities' initiatives to protect and educate consumers around data usage in an Internet era characterised by mobile browsing, cellphone users still have gripes around bill shock from out-of-bundle (OOB) usage.
And it seems even consumers who consider themselves educated in the mobile data department fall prey. Consumer platform Hellopeter bears witness to this, as do other media. Last week, a local radio station fielded calls around the problem, after one of the DJs complained about a R4 000 bill he received after surfing the Internet, unwittingly while subject to his service provider's OOB rates.
Towards the end of October 2013, the Independent Communications Authority of SA (ICASA) took out a full-page newspaper advert headed "ICASA alert to consumers on high billing caused by smartphones data usage" after it was inundated with complaints around high and wrongful billing by mobile operators. At the time, analysts warned the problem was only going to get worse.
However, mobile operators reacted immediately afterwards, outlining the measures they said they had already taken to combat the problem.
Overspend culprit
Antony Seeff, CEO of bill analysis company Tariffic, says "OOB-induced bill shock" remains one of the main woes cellphone users face when it comes to their finances.
"Over the past month, we have found that 38% of overspend comes from OOB data usage for voice lines. The problem is more severe for data lines, however, with OOB costs on these lines accounting for a massive 72% of the total costs of data lines.
"Interestingly, we have found that 'heavy cellphone users', with bills exceeding R1 000 a month, account for 86% of the OOB data costs. This goes to show that when there is bill shock, it is severe."
OOB-induced bill shock is primarily the symptom of two causes, says Seeff: poor communication between the service providers, and cellphone users being on the incorrect package and bundle based on their lifestyle.
Regarding the former, he says, communication is often vague and occurs on a once-off basis, where it should be real-time and completely transparent.
The other issue the company has seen raised, says Seeff, is the "blessing and the curse" that is postpaid contracts. "[Postpaid contracts] function as a credit agreement between you and your service provider, and once you've been credit-vetted, you basically have an uncapped credit line."
Other factors that also contribute are the data-chomping devices on the market today and, for travelling cellphone users, data roaming.
Legal obligation
Seeff says it seems some service providers view OOB usage as a profitable revenue stream, even if it comes at consumers' expense - while others are slightly more responsible about it by restricting OOB data usage to within defined amounts.
SA's operators attest to the latter, saying they continue to take steps to protect and educate the consumer around OOB use.
In terms of the Consumer Protection Act, operators are not legally obliged to warn consumers before they are about to breach OOB rates, but a "gentlemen's agreement" has been reached between them and the National Consumer Commission (NCC) in the interest of consumer relations.
NCC spokesperson Trevor Hattingh says the consumer body is aware of this issue and has engaged with MTN, Vodacom and Cell C. "Arising from these engagements, the operators have indicated their willingness to develop a technology that will automatically implement call and data limiting to protect out of contract consumers."
Operator role
Vodacom's contract OOB rates range from 45c to R1 per MB. Spokesperson Richard Boorman says the company does not disclose average out-of or in-bundle rates, but OOB spend on contracts (voice and data combined) is down 15% from previous years.
As far as warning consumers before they venture into OOB territory, Boorman says Vodacom informs customers when a service is about to expire. "We send notification SMSes when bundle data usage reaches 70%, 80% and 90%, and also when the bundle expires."
MTN SA marketing chief Larry Annetts says MTN is not legally obliged to warn customers when they reach their end of bundle, "but MTN does notify its customers in the interest of providing them with a seamless customer experience".
The operator's rates start at approximately 29c per MB, with standard rates for voice plans at 99c and data plans varying from 29c to R1 per MB. While it depends on the package a customer is on, MTN says its OOB rates are usually around 80% higher than in-bundle rates.
Annetts says MTN embarked on an OOB notification initiative in recent years, when the company changed to new rates and since data consumption gained traction. He notes a high bill can be caused by various factors, including roaming charges, software updates and personal abuse.
Cell C's OOB is currently 99c, while in-bundle rates (for data) range from 2c to 15c per MB. The operator notifies customers via SMS when they are close to depleting their inclusive or in-bundle data allocation and again once it is depleted. "The SMS to customers assists with mitigating bill shock, but from time to time we do receive complaints."
Telkom says OOB bill shock has not been a problem for the company, which started offering mobile services in 2010, through what was at launch branded 8ta. "At the very beginning, a redirect facility was put in place for the very purpose of preventing our customers from using data on OOB rates without being fully aware."
Telkom group communication head Jacqui O' Sullivan says, today, the company has various means of educating subscribers on the management of data use. "This is done via their product-specific terms and conditions and the product-related FAQ sections on our Web site. The mechanisms Telkom has developed to manage bill shock leave no room for subscribers to go over their monthly limit."
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