Shock mobile rates rise under scrutiny

2015-03-29 15:00

The National Consumer Commission will meet telecommunications regulator Icasa this week to discuss the recent shock increases in cellphone tariffs.

On Thursday, Vodacom said tariffs on its packages, including contracts, would rise by up to 15.38% on May 1 – hot on the heels of rival Cell C’s hike of between 6% and 17% in January and February.

But this could run foul of the Consumer Protection Act.

National Consumer Commission spokesperson Trevor Hattingh said the organisation had learnt through media reports about tariff increases, while fixed-term contracts were in force, from Vodacom and other network service providers.

“Although it seems unfair at face value, it could be linked to licence conditions approved by Icasa. We will therefore engage Icasa on this matter,” he said. The talks were to take place this coming week, according to Hattingh.

Consumers have been encouraged to approach the commission with their contracts to ascertain their fairness.

Vodacom spokesperson Richard Boorman said the operator’s tariff hikes were a bid to recover costs, such as the nearly R30?billion spent on upgrading the network over the past four years and voice and data revenue that had dropped by almost 50% over the past two years.

“On top of this, mobile-termination-rate cuts have had a major impact on our revenue, and costs meanwhile have increased due to, among other things, electricity-supply issues.

“Given the squeeze from both sides, we have had to review our tariff structures in tandem with implementing cost-reduction programmes within the company,” he said.

Cell C spokesperson Vinnie Santu said its subscriber agreements complied with the Consumer Protection Act. “Cell C has included additional value in many of its products.

For example, in the Straight Up 200 package, under the old structure customers received 200 megabytes of data, whereas the customer now receives 400Mb of data,” she said.

“Some other product tariffs were reduced.”

Boorman said Vodacom was using a clause in its contract terms and conditions reserving the right to vary its charges from time to time.

But the reasons provided for the tariff hikes – along with the terms and conditions – appear to be weighted in favour of the operator.

Its new tariff structure offers nothing new for the consumer – there is no corresponding increase in minutes, data or SMSes.

Section 48 of the Consumer Protection Act (CPA) requires that suppliers must not enter into an agreement to supply any goods or services on terms that are unfair, unreasonable or unjust.

A term or condition of a transaction or agreement is deemed unfair, unreasonable or unjust if it is excessively one-sided in favour of any person other than the consumer.

But Boorman said the operator’s contract terms complied with the act.

“It’s worth mentioning that our terms and conditions were reviewed when the CPA took effect on April 1 2011 and those terms and conditions, which have remained unchanged since then, were submitted to the consumer commission.

“This is not excessively in favour of any person other than the consumer. Our tariff increase is in line with a standard inflationary increase,” he said.

The weighted average increase took the number of people on each contract option into account.

The new tariffs mean Vodacom’s Smart Light contract increases the Smart M from R299 to R319, the uChoose Smart M from R329 to R349 and the Top Up315 from R315 to R335.

One gigabyte of top-up and contract data increases from R69 to R75 on a 24-month contract.

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