South Africa’s are no strangers to price increases, but when Vodacom announced last week that it will be raising tariffs across the board on contract subscriptions, many felt that it was a little bit unfair.
When mobile operators announce price hikes, it usually applies to new and potential customers only, with current subscribers remaining on their current fees until their contracts runs out. But Vodacom‘s announcement revealed that from 1 May this year everybody – regardless of when they signed up – will be subject to the increases.
This little detail isn’t sitting too well with the National Consumer Commission, as it might be in violation of the Consumer Protection Act, the legislation set up to protect consumers from unfair and unethical business practices.
“Although it seems unfair at face value, it could be linked to licence conditions approved by Icasa. We will therefore engage Icasa on this matter,” National Consumer Commission spokesperson Trevor Hattingh told City Press.
According to the paper, Vodacom hiked the prices in order to recover costs from other failing areas from within Vodacom, such as voice and data revenue declining by almost 50% over the last two years.
“On top of this, mobile-termination-rate cuts have had a major impact on our revenue, and costs meanwhile have increased due to, among other things, electricity-supply issues. Given the squeeze from both sides, we have had to review our tariff structures in tandem with implementing cost-reduction programmes within the company,” Vodacom spokesperson Richard Boorman said.
According to the Consumer Protection Act, Section 48 (chapter 2, part G), it states that suppliers should offer a service or goods “at a price that is unfair, unreasonable or unjust”, but Boorman is of the opinion that everything is above board.
“It’s worth mentioning that our terms and conditions were reviewed when the CPA took effect on April 1 2011 and those terms and conditions, which have remained unchanged since then, were submitted to the consumer commission. This is not excessively in favour of any person other than the consumer. Our tariff increase is in line with a standard inflationary increase.”