Out-of-bundle rates: Daylight robbery

Earlier this year, I was involved in an argument with a sales representative from my mobile operator. 

My cellphone bill was significantly higher than the standard monthly cost of my package and I wanted to know why. 

As was explained to me, my data bundle had expired a few days before the end of the month, with no notification from my service provider, and the measly few megabytes (megs or MB) of data that I had used in those few days had been billed at an out-of-bundle rate. 
“You mean to tell me that those few megs of data cost that much?” I asked the sales representative. He nodded. “Why didn’t you warn me that I was being charged out of bundle?”
He replied: “You never asked for us to notify you, do you want to set a notification now?”  

By this point I was seeing red. These mobile operators call what they offer a service, but when things go wrong it feels like anything but. 

As a journalist who has written about technology for over a decade, I can state that as fact. My inbox bears all the proof I need – numerous complaints from irate mobile subscribers. 

After my bill shock, I now receive a notification in those few months where I breach my bundle and I can choose to turn off the mobile data and use WiFi data for a few days, so there are no nasty surprises when the bill arrives. 

You would think giving subscribers the information they need to make decisions like this would be part of offering a service. 
Vodacom recently announced that it was cutting its out-of-bundle rates by as much as 50% in mid-October. 

Prepaid and top-up subscribers will be billed at 99c per MB, while post-paid subscribers will be billed a rate of 89c per MB.
For Vodacom subscribers this is good news. Vodacom stated that it had reduced its normal data rates by almost 19% in the past year and was now reducing out-of-bundle rates, which it had committed to doing previously. 

However, what the telecoms giant wasn’t announcing was that it was the effective last mover in the market.  

MTN subscribers have been enjoying similar rates since early 2015, and Cell C subscribers since 2014.
A recent opinion piece by independent marketing consultant Andrew Fraser, and originally published on TechCentral, referred to the announcement of the 50% cut in out-of-bundle rates as “lipstick on a pig”. 

The reason for Fraser’s characterisation is that some out-of-bundle rates equate to over R2 000 per gigabyte (GB), which he argues is “extortionate”. 

He argues that this represents a 1 300% premium on a bundled GB. Fraser says the new reduced rates still represent a 600% premium.
In South Africa, there are some high- and middle-income subscribers who can afford multiple-year contracts with big data packages; this is where value is the best. 

Low-income subscribers generally buy small data packages, where the value is worst. Low-income users, who have a limited data spend per month, are affected to a much greater extent by shock out-of-bundle bills.
Fraser points out a user who can only afford to purchase a daily 20MB bundle can end up paying double by simply using 4MB of out-of-bundle data. 

Fraser insists that Vodacom is being “disingenuous” when it publicises the percentage drop in the out-of-bundle rates, because the basis for that drop is “extortionate”. “You can clean up a pig, put a ribbon on its tail, spray it with perfume, but it’s still a pig,” writes Fraser.  

If you consider that the move to define internet access as a utility has been ongoing for years, it’s worth pondering how we as consumers would respond if our electricity and water supply were distributed the same way.

Imagine you had to predict your monthly electricity or water usage and every time you exceeded that limit, without warning, you were billed at a rate that is a multiple of six or even 13 times the normal rate. 

Would we tolerate this for a second?  

I don’t think so.  

As I contemplated this out-of-bundle conundrum, I became curious about the origins of the word “bundle”. 

It seems it’s a word that came to use in the 14th century and has its origins in the Dutch word bondel, a diminutive of bond, meaning to bind. 

The common understanding of the word is the gathering of items together.  

However, the word “bundle” has another slang meaning, which dates from 1899 and means a lot of money, as in “he made a bundle trading those shares”. 

Interestingly, this slang meaning of the word has its origins in references to the ill-gotten loot from a robbery. 

A 50% cut in out-of-bundle rates is a start, but a lot more needs to be done to protect consumers, because the mobile players are still making a bundle.

This article originally appeared in the 19 October edition of finweek. Buy and download the magazine here.

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