No More Free Cell Phones

I’m not entirely sure how I should take this news. They say that it will reduce call costs as the network providers will reduce their inflated call prices that they use to recompensate the ‘free’ cell phones they provide.

Well, I guess that would be a positive. Does that mean that the after the 100 free minutes on my basic R 140 contract, I would only pay R 1.00 a minutes instead of R2.00? Does that mean that my average bill of R 250 would be reduced to the R140 that I currently pay? Or, as I would imagine, would it mean that instead of spending R 110 a month more I would only spend R 55 a month more?

So I would still be paying R 195 a month, but only now I wouldn’t have a R 3,400 cell phone, but, well, no cell phone. Hmmmm.

So over a period of 24 months, I would save R 1,320 but I would be out R 3,400 for the same period (as I would have to buy my own phone). Ergo, this idea by ICASA would end up costing me R 2,080.

Yeah, I can see how this is in the interests of the people. But, the thing is, the people use pre-paid mechanisms, so it doesn’t actually make a difference to them, only the 30% odd that actually have contracts, usually for work purposes.

Ergo, I invision a period where cellular phone sales drop, contracts drop in favour of prepaid, businesses lose more money as they have to shell out for the phones as well as the contracts and every body essentially loses… except perhaps the guy on the street with a R 300 cellphone who spends R 100 a month on call charges with his prepaid account.

There, of course, would be more of these guys (‘n’ gals) now as mostly everyone is reduced to using prepaid accounts with the cheapest phones they can get.

If only 30% of the market uses contracts, why make it less likely for people to use contracts? It doesn’t make much sense to me. They talk about inflated call charges, but most contracts offer better call rates and free minutes when compared to prepaid.

Unless the reduction in call charges is dramatic, and by that I mean more than 50%, I fail to see how this helps the consumer in anyway.

Maybe I’m missing something.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s