MTN South Africa contract customers shocked by over 20 percent tariff increase

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MTN South Africa contract customers are complaining about more than 20% increase in their bills contrary to the 5% the company announced in March this year.

In March, MTN announced that its contract packages in South Africa would increase by about 5% from May 2022. The company assured customers that all current discounts, terms and conditions would remain unchanged despite the increase.

The changes have come, as promised. But, instead of 5%, several contract product prices have increased by over 20%. Several MTN subscribers reported bill shocks.

Contract customers are MTN users who enter a 24-month contract with MTN to receive a fixed amount of data monthly at a cheaper price than they would have on a prepaid plan.

The problem

The new prices are higher than expected because MTN applied the increases to the “base price” of the prepaid plans instead of the “real price” that contract customers automatically pay monthly for plans.

The “base price” of an MTN plan is the cost of the prepaid plan which MTN discounts and advertises and sells as “contract plans”.

This advertised discounted price is largely known as the “real price” of the contract plans bought by contract customers. For example, the base price for a 24-month My MTNChoice 30GB is R1,299 (\$82.37) per month. But MTN places a huge discount of R1,000 (\$63.41)  on that base and sells it at R299 (\$18.96) per month on a contract to some customers. So, that is the real price known to those customers.

Customers were expecting the 5% to be applied to the real price (\$18.96), but it was applied to the base price (\$82.32) which inflates the base price to R1,365 (\$86.55). So, with the of \$63.41 (R1,000), the “real price” on the contract now becomes R365 (\$23.14) instead of R314 (\$19.91), which would be if the 5% increase is applied to the contract price instead of the base price.

What MTN has to say

MTN SA’s Executive for Corporate Affairs Jacqui O’Sullivan confirmed the increase, maintaining that the it was unavoidable because, without the price hike, customers whose contracts expire this month would still have to transition into the more expensive monthly subscription that is based on the initial base plan.

She, however, affirms MTN’s readiness to discuss their contract renewal and upgrade options as per the status quo.

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