MTN, Cell C hiked the cost of voice calls - while offering what appeared to be freebies
- In the last half of 2018 both MTN and Cell C more than doubled the cost of voice calls on their default plans, a report by regulator Icasa shows.
- Both offset those huge increases by special deals that offered 100% and 200% extra value respectively.
- But no matter how you slice it, MTN customers still paid more for voice calls, and Cell C customers would need to make a lot of calls to other Cell C customers to see a relatively small benefit.
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In the last half of 2018 both MTN and Cell C massively increased their charges for voice calls on their default "flat-rate" pre-paid plans, a new report from the Independent Communications Authority of SA (Icasa) shows.
Those increases were seemingly offset by attractive special offers of 100% and 200% added value in airtime respectively. But a review of Icasa's numbers show that MTN customers were still paying more to make phone calls, and Cell C customers would have to make a lot of calls to other Cell C customers in order to see a benefit – of 12%.
If customers on either of the new plans failed to make enough calls that stayed within the MTN or Cell C networks, they would end up paying more on average for their voice calls, despite the promises of added value.
Icasa's numbers also suggest that customers could be hard pressed to navigate a maze of ever-changing prices from the major providers of voice phone calls.
Between July and the end of December Cell C, MTN, Telkom, and Vodacom filed 153 new tariff plans and promotions, or extensions and amendments to existing packages.
That is an average of a tariff filing every 29 hours.
MTN more than doubles its price – and doesn't give back quite as much
In November 2018 MTN introduced a new default plan for new pre-paid customers, first called MTN Base 2 and later renamed to MTN Connect, in the tariff category Icasa defines as "flat-rate tariffs".
Where its previous default, MTN Pay Per Second, charged the equivalent of 99 cents per minute for calls, MTN Connect costs R2 for calls to all networks – a price increase of 102%.
But that big price increase came with the "MTN 100% Recharge Giveback", which offers 100% extra value for every recharge of R5 or more.
The catch: that extra value can be used only for calls to other MTN numbers.
The net result was that every customer on the new default plan was paying at least 1% more for voice calls, R1 per minute instead of 99 cents per minute – as long as they were making enough calls to other MTN numbers.
Every rand of that MTN-to-MTN value not used represented an extra cost.
Cell C's UltraBonus comes with '200% FREE bonus airtime' – which actually saves 12% for some
A similar price adjustment in Cell C's flat-rate tariff earlier in 2018 was slightly more complicated than MTN's, with a slightly more complicated impact on customers too.
In mid-July, Icasa says, Cell C replaced a 66 cents per minute default prepaid plan with its Cell C UltraBonus offer, which charged the equivalent of R1.75 per minute, a price increase of 165%. As MTN would do later, Cell C offset that with a free airtime bonus, though in its case the promised extra value was 200%.
The catch: half of that extra airtime is for use on calls to other Cell C customers only.
The result was that a R5 recharge automatically came with another R5 valid for calls to any network, and R5 valid for calls only within the Cell C network.
For customers who make no calls to other Cell C numbers, that made for an effective per-minute price of 87.5 cents, a 32.6% increase on the previous price. Those who used their full allocation of Cell-C-to-Cell-C minutes, by speaking to other Cell C clients at least a third of the time, ended up paying an effective 58.3 cents per minute for their calls, a discount of 12% on the old 66 cents price.
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