Recent Independent Communications Authority of South Africa's (ICASA's) regulations may protect users from automatic out-of-bundle (OOB) billing but those opting in to OOB data rates are still going to be hit with a massive bill, and Cell C customers are the worst off.
This is according to new data from ICASA's most recent bi-annual tariff analysis report, which covers the period 1 July 2018 to 31 December 2018. These show that customers could pay as much as R22 500 for 20GB of data if they go out-of-bundle and going 1GB or 1.5GB out-of-bundle could cost them anywhere from R300 to over R1 600.
At the beginning of March, ICASA's new End-user and Subscriber Service Charter Amendment Regulations came into effect which put an end to automatic OOB billing in favour of an opt-in or opt-out approach.
The automatic switch to out-of-bundle billing and the huge price gap between in-and out-of-bundle prices had been a concern for years. Subscribers now have to give networks the go-ahead before they are charged OOB data rates, but if they do, they are still in for a massive bill.
The costs of data from SA's four big mobile operators come from ICASA's newest bi-annual tariff report and compare a standard prepaid bundle with OOB prices.
Cell C
According to ICASA, Cell C's OOB data rate is by far the highest at R1.10, which means if a user goes out-of-bundle by 1.5GB, they will pay R1 689.60 instead of the R149 it would cost for a Cell C 1.5GB bundle. This is a variance in price of R1 540.60 for the same amount of data.
As the bundles get bigger, the OOB cost balloons. If a Cell C customer were to buy a 4.6GB bundle, they would pay R299 but if they go out-of-bundle by the same amount, it would cost them R5 068.80, a variance of R4 769.80.
If a Cell C subscriber were to use 20GB of data out-of-bundle, it would cost them a whopping R22 528 compared to R799 if they had bought a bundle. That is R21 729 more for exactly the same amount of data.
* Variance in rands is the difference between the standard bundle price and the OOB equivalent price
Telkom
In comparison, Telkom has the lowest OOB data rate at just R0.30 per MB, although this used to be R0.29 in the past. Telkom customers will face the lowest fees if they use data OOB but the difference is still noticeable.
For example, if a Telkom customer buys a 100MB bundle, it will cost them R29.25 but if they go out-of-bundle by 100MB, it will only cost an extra 75c at R30.00. However, as the bundles get bigger, so does the cost factor. A 1GB Telkom prepaid bundle costs R100 but if you go out-of-bundle by 1GB, it will cost R307.20, a variance of R207.20.
If a Telkom subscriber uses OOB data worth 20GB, it will cost them R1 996.80 compared to R905 for a 20GB bundle, which is a difference of R1 091.80 in price. However, the OOB cost for a Telkom customer for 20GB is still around 10 times less than that of a Cell C customer.
Vodacom
Vodacom and MTN both have significantly reduced their OOB rates over the past year and in 2019, both operators halved their OOB data rates from R0.99/MB to R0.49/MB. However, at that rate you still end up paying a lot more per MB for your data if you choose to go out-of-bundle.
If you buy a 1GB Vodacom bundle, it will cost you R149 but if you use 1GB out-of-bundle, you will end up paying R501.76, a variance of R352.76. However, last year, before the price cut, 1GB out-of-bundle would have cost you double that at R1 013.76, or a variance of R864.76.
5GB out-of-bundle will cost you R2 508.80, compared to R5 068.80 at the end of last year, but if you bought it as a bundle it would only be R405. Similarly, a 20GB bundle costs R1 010 on the Vodacom network but if you use that much data OOB, you will end up paying R10 035.20, but at least it's not the R20 275.20 you could have paid in December 2018.
MTN
On 29 January 2019, MTN dropped its OOB data rate from R0.99/MB to R0.49/MB and this has made a massive difference to the amount consumers end up paying out-of-bundle. For instance, 100MB used to cost you R99 OOB, this has dropped to R49, but its only R29 if you buy a 100MB bundle. Similarly, when you buy a 1GB MTN bundle, it will cost you the same as Vodacom at R149 but if you use 1GB OOB you will also end up paying R501.76.
If you go 10GB out-of-bundle on MTN, you will pay R5 017.60, compared to R499 for a bundle, but this used to be R10 137.60 last year, which was a variance of R9 638.60. 20GB of data on the MTN network will cost you R899 but out-of-bundle you will pay as much as R10 035.20, a variance of R9 136.20, and last year this would have cost you R20 275.20, or R19 376.20 more than the bundle rate.
This week the Competition Commission issued a number of recommendations as part of its provisional report on its data services market inquiry, which was launched in August 2017. Among these was a request for a commitment from operators to keep maximum out-of-bundle rates relative to in-bundle rates.
The commission said its inquiry found that punitive OOB rates are more frequently imposed on purchasers of small data bundles, or those that do not commit to a bundle at all, and these are generally lower income consumers.
*All pricing is courtesy of ICASA's bi-annual tariff analysis report for 1 July 2018 to 31 December 2018.
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