Can cellphone networks hike tariffs for contract customers?

Vodacom recently announced tariff increases on five of its plans: Vodacom Smart, uChoose Smart, uChoose Flexi, Top Up and Mobile Broadband packages. These will come into effect on 1 May 2015 for both new and existing contracts.

Many customers feel that it is unfair and unlawful for them to impose these hikes on existing contracts, as the package was entered into based on the initial tariffs, and that the contract price was based on the initial cost of the handset being subsidised.

Richard Boorman, executive head for corporate communications at Codacom, says the increases have only come about due to the rise in costs of providing the service, citing the effects of load shedding as well as the weakened Rand. Boorman also says that due to the drop in call terminations

He says that due to load shedding, they have had to secure reserves of diesel, as well as replace batteries more often as their lifespans have been compromised. He explained that because there are also times when calls aren't made during power cuts, their income stream is affected.

Boorman also pointed out that there is a clause in the contract that stipulates that tariff increases can take place, but that perhaps it needs to be better pointed out to customers.

The National Consumer Commission says that member of the public can lodge complaints with them, so that they can investigate whether the increases are unreasonable, and take it further via the courts or communications authority ICASA.

Consumer Commissioner Ebrahim Mohamed says he finds it worrying that a big corporate like Vodacom did not better project for the future. Boorman responded that it was not possible to predict the direction in which the Rand would go, and that they never expected the electricity situation to be this bad.

Listen to Kieno Kammie's interview with Richard Boorman and Ebrahim Patel below:


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