Cellular subscribers are losing a small fortune every month as so-called free minutes and data bundles expire, when they should roll over for three years.
And SA's largest cellular networks seem hell-bent on retaining the status quo, and won't budge an inch to give consumers a fair chance under the Consumer Protection Act.
This is a ridiculous situation; it's not as if the money consumers paid the cell companies will expire after two or six months if they don't bank it - which they most certainly do, judging by recent results.
On top of that, as ITWeb discovered after a recent investigation, if consumers want to cancel contracts inked after April, they are told to cough up the balance of the deal.
This contradicts the mobile operators' official policies. Unless some training has taken place and new call centre scripts written since ITWeb's investigation, thousands of contract subscribers will simply let contracts run their course, and then find a service provider that will protect their rights.
The National Consumer Commission argues the CPA also applies to contracts signed before the law came into effect.
SA's largest networks disagree: they refuse to grant subscribers any CPA rights if they signed deals before April. True, the law specifies it doesn't apply to contracts inked before 1 April, but does it matter when every single pre-CPA contract will expire by April 2013 anyway?
Boxing smart
Cellphone companies should take a leaf out of Autopage's book. It says consumers can use the CPA to get out of contracts regardless of when deals were signed.
That's a clever move.
Cellphone companies should take a leaf out of Autopage's book.
Nicola Mawson, senior journalist, ITWeb
Consumers will vote with their money and sign up with companies that honour the spirit of the law, rather than blindly follow it to the letter because that's what it says. Cellphone companies must understand that there really are only so many contracts that can be sold.
It's simple economics: there are 50 million South Africans, of which 38 million already have cellphones. Discounting those younger than 10, that's only a potential market of 37 million.
Contract subscribers will be found within the 13 million employed citizens, and there are already 10 million subscribers with fixed-term deals.
So, there aren't many people out there who don't already have a service provider. The pool of potential new subscribers is limited to consumers that simply rotate from one provider to the next, looking for great deals, better service and improved coverage.
All the cellular companies are investing millions in their networks, and battling it out to offer cheaper deals. A quick look at the operators' Web sites shows a plethora of limited-time special offers, each one cheaper than the next.
In addition, none of the networks are stable enough. The Independent Communications Authority of SA (ICASA) recently found operators aren't meeting the minimum dropped call rate target.
Operators say this isn't so, there's nothing wrong with the networks and ICASA's methodology is flawed. Despite what the networks say, reports of dropped calls are a dime a dozen across all the operators.
All the networks have their problems. It will come down to service when consumers choose which company to sign up with. Networks must concentrate on answering calls quickly, solving the problem, and giving out the right information.
The cellphone company that does this better than its competitors will stand out head-and-shoulders above its peers, and will keep and grow its subscriber base. The number of subscribers is the ultimate fight between operators.
Tell it like it is
Yet, it's not only about answering a call in super-quick time and solving problems efficiently, it's also about treating consumers with respect. Operators must go the extra mile and not punish consumers just because they signed a contract before the CPA came into effect.
It's also about owning up when you make a hash of things. Vodacom CEO Pieter Uys publicly apologised after the network crashed recently, taking the blame. Subscribers were angry, but he got out there, was available for interviews and responded to queries on Twitter.
Don't say there's nothing wrong with coverage when consumer complaints abound. Promise to investigate, and then do so, and report back - openly.
Operators also should not interpret consumer protection legislation in a way that best suits them, because then they can use it to keep subscribers locked in. Sure, letting everyone cancel contracts with just 20 days' notice and only charging what's owed on the handset may negate having a contract base because everyone can switch around at will.
Yet, allowing people to get out of contracts easily is like trusting them not to. If people know they have a right, they will stick with the operator that offers them protection, and not run off to an unknown entity.
If subscribers know their complaints will be taken seriously and sorted out, they aren't going to leave for another operator that has a bad track-record.
Call it goodwill if you must put a name to it. It can't be reflected on the balance sheet, or income statement, but it will make both look a lot healthier over years to come, because this is how cellular companies can grow market share in a country where every man and his dog have cellphones.
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