Smoke and mirrors in contract plans
Vodacom’s new smartphone contract tariffs are obscured by the same smoke and mirrors that dog mobile contracts generally. It may pay to go prepaid. By Craig Wilson.
Vodacom announced a new set of smartphone contract tariff plans at the weekend under the heading “all-in-one Smart Plans”. Unfortunately, Vodacom seems intent on continuing to offer consumers packages that are founded on obfuscation and copious fine print rather than simplicity and transparency.
Like most contracts from most if not all operators, they give consumers things they really don’t need and charge them for the privilege. And the small print is enough to make one’s head spin.
Vodacom’s “smart” tariffs include voice, SMS and data allowances and range from R135/month to R1 700/month for 24 months. The packages are clearly a response to Cell C’s recent contract price cuts, which include variable-length contracts and the ability to add on data and SMS bundles to create packages that fit.
Aside from the entry-level “Smart Light” package, Vodacom’s other three new packages offer a selection of minutes that can be used at any time to any network, along with “promotional” minutes that apply only to calls to other Vodacom customers. The promotional minutes don’t carry over, but the regular minutes do and remain valid until the end of the following month.
Though it’s difficult to compare the Vodacom and Cell C offerings on a like-for-like basis because the bundled minutes don’t correspond exactly, the pricing between the two operators’ offerings is fairly similar once you cut through the Vodacom clutter. However, when it comes to clarity, the operators remain worlds apart.
Pricing is similar if one looks at the minutes that are applicable to any network at any time. Vodacom would no doubt prefer that consumers compare its 810-minute “Smart Advanced” package with Cell C’s “Straight Up 800” package, but of those 810 minutes on the Vodacom deal, only 450 apply to calls to any network, with the rest for calls to other Vodacom subscribers only. The minutes on Cell C’s offer apply to any network.
Vodacom’s Smart Light package has all sorts of things wrong with it. For a start, its 75 core bundled minutes are for use only in off-peak times. And they’re billed per minute. It’s astounding that mobile operators are even allowed to bill on a per-minute basis anymore. It’s good for operators but terrible for consumers.
As if that wasn’t bad enough, Smart Light customers can look forward to a rate of R2,70/minute for out-of-bundle calls to networks other than Vodacom or to land lines. Considering that the operator pays a lower interconnect fee to Telkom than it does to other mobile operators calls to fixed lines should under no circumstances be the same rate as calls to other mobiles.
All in all, this is another example of an operator baffling consumers with conditions and clauses rather than offering simplicity. Vodacom is relying on the fact that most people are too lazy to undertake the burden of changing networks. Cell C is trying to make its offerings attractive enough to warrant the effort.
That’s not to say Cell C is perfect. Like the other operators, it’s in the business of turning a profit. Although its new contract offerings — where you can pick and choose the contract terms and products that are right for you — are innovative, it still saddles customers with potentially unnecessary allowances like hundreds of SMSes — if you want 400 minutes of talk time you have to take 400 SMSes and 400MB of data, too. You can add data or SMSes, but you can’t remove them.
Of course, you can opt for fewer minutes and SMSes and then top up the data, and I wouldn’t be surprised if the operator sees this happening increasingly as customers move to data-based services and away from voice and SMS.
Ultimately, more times than not contracts result in consumers paying for features they don’t use. Why? So that they can get the latest handset and remove the upfront cost by stretching it out over two years.
Essentially, contracts allow people to acquire handsets on a hire-purchase-type model and tempt them at the end of the period with something new and shiny, in exchange for locking them in for a further two years. Most of us wouldn’t buy an appliance or a piece of furniture on hire-purchase unless we absolutely had to, yet we have no qualms about doing so with a mobile phone. It’s peculiar behaviour.
My advice? If you want to side-step the fine print and pitfalls of mobile-phone contracts, there’s only one solution: buy your handset for cash and then go onto prepaid or take a contract that doesn’t include a handset. You’ll save a fortune, guaranteed. And you won’t need an actuary to help you understand how your cellphone contract works. — (c) 2012 NewsCentral Media
- Craig Wilson is TechCentral deputy editor