MTN created a 1MB ‘bundle’ and opted in all its customers - because new rules don’t allow ruinous out-of-bundle data charges

Business Insider SA

News analysis

MTN auto-renew 1MB data bundle message
  • New consumer-protection rules bar cellphone companies from charging exorbitant out-of-bundle rates unless customers actively sign up to pay them.
  • So MTN created a new 1MB "bundle", and signed all its customers who haven't made another choice up for it.
  • Instead of being charged for 1MB out-of-bundle at a time, MTN users will be charged for one 1MB bundle at a time.
  • The bundle is fairly cheap, at least compared to out-of-bundle data.
  • Things get a little bit confusing when it comes to dates and prices, though.
  • For more, go to Business Insider South Africa.

From mid-May and early June (for prepaid and contract users respectively) every South African MTN customer who has notmade other arrangements will automatically be subscribed to a new "data bundle" – of 1MB, the smallest increment in which data is typically sold.

That "bundle" will, to the casual observer, look almost exactly like non-bundled data. Every time they use up 1MB of data they will automatically buy another 1MB bundle, just as they would have been charged for 1MB of out-of-bundle data before. From the perspective of users there will be only one major difference: they will pay 40c per megabyte instead of the 49c per megabyte that MTN was previously charging for the equivalent amount of data out-of-bundle.

UPDATEMTN has abandoned plans to opt all its users into a 40c 1MB “bundle” from this week

From MTN's perspective, however, there is a huge legal difference between 1MB out-of-bundle and a "1MB bundle": it is legally allowed to automatically sell bundles, while it is no longer allowed to automatically charge for out-of-bundle data.

So instead of cutting off customers once their data bundles run out, as it must currently do, MTN will instead charge those customers the equivalent of just under R410 per gigabyte, as long as their airtime or pre-set usage limits don't run out first 

The 1MB bundles were announced to MTN customers in SMSes sent this week, and which left at least some of those customers angry and confused – especially after they found out that in order to opt out of the 1MB "data bundle", they would have to wait for it to be activated on their accounts first.

In response to questions from Business Insider South Africa, MTN initially provided a statement in which it said "providing this service is to solve the problem of our customers getting frustrated when they are being cut off, in the middle of a message or online, when their data expires or runs out".

"Customers are currently being cut off either because they have opted not to use OOB [out-of-bundle] data or they have not made a choice at all – so they are automatically barred," the company said.

In terms of the End-user and Subscriber Service Charter (EUSSC) rules from the Independent Communications Authority of SA (Icasa), mobile operators may no longer start charging out-of-bundle data rates, which were historically priced around R2 per megabyte, when data bundles run out. Instead they must now either cut off users, or charge them in-bundle rates – unless they have explicitly chosen to either opt in, or opt out of, out-of-bundle data.

That makes things more complicated for MTN customers that have opted into out-of-bundle rates already. In response to further questions, MTN on Friday confirmed that previous out-of-bundle data rates it announced in January still apply. That puts its customers into one of four possible groups:

  • Anyone who has not made an explicit selection will be opted into the 1MB "bundle", and will pay 40c per megabyte as soon as it goes live.
  • But anyone in that group can opt out of the 1MB bundle after it goes live, which will see them automatically disconnected from the data network when their bundles run out.
  • Anyone who has previously opted into being charged for out-of-bundle data will be charged 49c per megabyte.
  • But anyone who has previously opted into out-of-bundle data and has never loaded a data bundle at all will be charged 29c per megabyte.

Those on the 1MB bundle will pay R409.60 per gigabyte of data, those on the standard out-of-bundle rate will pay R501.76 per gig, and those without any data bundles will pay R296.96 per gigabyte of data. 

A standard pre-paid 1GB MTN data bundle from MTN, valid for one month, currently sells for R149.

The dates too are no entirely simple: on Thursday MTN said the 16 May implementation date for pre-paid users "might move out slightly", while the 7 June date it gave post-paid customers has already been moved to 6 June.

In order to opt out of the new 1MB bundle, MTN customers must wait for it to be activated (in mid May and early June respectively for prepaid and post-paid users), then dial *135*6#.

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