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Johannesburg - South Africa only has four major mobile networks but there are over 10 000 combinations of phone contracts and add-on bundles, sparking debate about whether consumers risk being confused.
This is according to measurement company Tariffic - which tries to help consumers and businesses save money on their cellphone bills.
The 10 000 figure was highlighted in Tariffic’s postpaid cellphone package tracker for the second quarter of 2015.
In its report, Tariffic explained how the South African cellular market is “incredibly complex”.
“Most people are spending far more than they should on costly cellphone contracts that generally don’t suit their needs,” read the report.
“Between Vodacom, Cell C, MTN and Telkom, there are over 10 000 different combinations of cellphone contracts and add-on bundles and it’s almost impossible for ordinary South African cellphone users to choose the contracts and bundles that actually suit their needs… or their pockets,” the report added.
READ MORE: SA's best mobile phone contracts revealed
Speaking to Fin24, the chief executive officer of Tariffic Antony Seef further explained how the local postpaid cellphone market is confusing.
He said various older contract offers, for instance, are still available in the market and add to the 10 000 figure.
"The one thing to mention is that there's so many legacy packages out there in the market,” Seef said.
Seef explained that this could risk further confusion in the market.
"We in the industry; we've got guys who understand these packages better than anyone else I'd say and it took us a while to wrap our heads around this, and I don't know how any consumer is meant to be able to understand these kinds of packages,” he said.
For example, Seef said that some of Cell C’s new Epic contract plans, which include buyout deals of up to R10 000, illustrate this confusion.
"So, what they've done on these Epic packages, and this is just one example... for an Epic 200, for example, it's going to cost you R129 but you get R200 inclusive value, and then they say you have a call rate of R1.89 per minute. But that R1.89 is on the R200 that you bought for R129. So, the effective call rate for that comes to R1.22 if you calculate it based on how much you're actually paying if you're only paying R129. So, if that's not confusing, I don't know what is,” said Seef.
Cell C, though, told Fin24 that its Epic contract packages are not confusing.
READ MORE: Cell C wants to buy your old contract
“The Epic Contracts are not as complicated as made out by this report,” a Cell C spokesperson told Fin24.
“Simply add 30% over and above what the customer is paying to understand the value of the contract. Also, this value can be used for any service available on the Cell C network, be it voice, data or SMS, which releases customers from the concerns of having particular offerings bundled onto their contracts,” the Cell C spokesperson said.
The Cell C representative went on further to say that the company’s up to R10 000 “buy-out value is also not included in the report, which obviously adds to the value of these products”.
Other mobile networks respond
Fin24 also reached out to other mobile networks about whether their multitude of contract options could confuse the market.
Vodacom spokesperson Richard Boorman told Fin24 that his company has “actually taken steps to reduce the complexity of our offering”. Vodacom, for example, has a website that helps consumers find the packages that suit them in a bid to strip out the complexity.
Boorman also said that having more options could also benefit the consumer.
“I wouldn't say that having a wide range of options is a negative - consumer choice is generally considered a virtue and we work hard to make sure we are able to provide customers with exactly what they need,” he said.
Meanwhile, mobile network MTN has also defended the need to have more contract options.
“A one-size-fits-all is a blanket approach that does not address the needs of our subscribers any more,” Larry Annetts, chief marketing officer at MTN SA told Fin24.
“We’re continuously working on improving our products according to our customer’s needs, we are confident that we will have a simplified range of products that will not compromise the individuality that the current product range offers to our different customer segments,” Annetts said.
Annets further added that MTN tailors and customises its product range according to customer feedback from the market and that these products and solutions are also influenced by “evolving consumer usage patterns”.
South Africa’s third largest mobile network Cell C also said that it tried to simplify its contracts previously but that it realised customers want choice.
“Two years ago Cell C simplified its contract offerings to entice customers to its network,” a Cell C spokesperson told Fin24.
“However, what we have found is that customers are looking for choice and value and we have introduced new packages for those looking for offerings that are tailored to their specific needs. While we still have the more simple offerings available, the more tailored offerings are proving to be more popular,” said the company.
Cell C also said that it tailors its offerings based on the needs of various market segments and its contracts “evolve constantly to suit customers' specific needs”.
Does more choice help consumers?
Seef has said that more choice can help customers, but only if they know what they’re looking for.
He said that packages such as ‘My MTN’ packages can give consumers flexibility.
"These My MTN packages: I love the packages because I love the flexibility that it gives consumers. So, if you know exactly how many calls you're making on that off-net; how much data you're using, all of that, then you could basically construct the perfect package for you. From our perspective, it makes a lot of sense. And from a consumer's perspective, no-one understands that kind of stuff,” Seef told Fin24.
The likes of First National Bank (FNB), which has recently launched a mobile virtual network that uses Cell C infrastructure, also has a flexi contract option that helps consumers create their own voice and data contracts that stretch over customised periods of time.
But only savvy consumers are likely to take advantage of these types of contracts, said Seef.
"Unfortunately, most of the market... isn't that tech savvy or doesn't have that kind of understanding that they need to review that on a monthly basis,” he told Fin24.
View Tariffic's latest tracker data below:
