Holdsworth accuses operators of ‘robbery’

AppChat CEO John Holdsworth has attacked mobile operators, saying their pricing practices amount to “robbery”. By Craig Wilson.

John Holdsworth

Outspoken AppChat founder John Holdsworth has challenged SA’s incumbent mobile operators to do away with peak and off-peak rates and adopt “pay-for-what-you-use” models.

“Overage”, where operators charge higher out-of-bundle rates once contract users have exhausted their voice, SMS and data bundles, is “absolute robbery”, Holdsworth says. He was speaking at a retail broadband conference in Midrand.

There is no reasonable explanation for why operators are able to get away with overage beyond protecting revenue and because they’ve been able to get away with it, he says.

“There’s no reason for it other than to empty your pockets. Operators charging higher out-of-bundle rates are basically just ensuring you get penalised for using more of their services.”

Holdsworth bemoans the state of mobile telecommunications in SA and says contracts are complex and inflexible, networks are patronising about the terms when asked for clarity and one should “trust estate agents more than mobile networks”.

With his start-up AppChat, Holdsworth says he hopes to introduce what he calls the first independent competitor at the services rather than the infrastructure level. He says this will disrupt the “vertically integrated duopoly” in SA, where two operators control the retail and wholesale markets.

He says he plans to launch AppChat in February next year, despite a recent legal setback where high court judge Selby Baqwa ruled comprehensively against him and in favour of the JSE-listed Reunert. Baqwa found that Holdsworth had breached his restraint of trade and actively solicited employees and customers of Reunert subsidiary Nashua ECN in launching AppChat. Holdsworth, who has now filed an application for leave to appeal, was the former CEO of ECN and sold the business to Reunert in 2012 in a deal worth R172m.

AppChat intends going after the corporate market and high-spending consumers and will not have a prepaid offering at launch, Holdsworth says.

With the right proposition — and this includes providing converged services — he believes AppChat will be able to convince customers to switch.

“The incumbents are trying to protect revenue models,” he says. “But we want to make it cheaper to call a Telkom number using an AppChat Sim than calling from one Telkom line to another.”  — (c) 2012 NewsCentral Media