Are Uganda's telecom companies screwing their customers?

Charged 2744/= ! I was on the phone for barely 5 minutes

Among the breathtaking things I have come to appreciate about Uganda is the power that telecom companies wield in this country. Economic power is of course not a bad thing but Uganda is the only country I have lived in where telecom companies engage in price-fixing, banking, usury (lending you 2,000/= in airtime you don’t have and charging you 800/= for the loan), gambling and, of course telecommunications almost at will.

I will focus on Airtel which is what I know best but the other communications companies (MTN, Warid, Uganda Telecom, Orange) are not that different since they operate as a cartel of sorts. A little more on that later.

Airtel used to be called Celtel. Then it became Zain which it was when it flew in R Kelly and Akon, at astronomical cost, for what turned out to be extremely disappointing concerts.

Now it is called Airtel, having been acquired by Bharti Airtel, an Indian company.

Airtel charges a tariff of  4/= per second for pre-paid phone calls. That means that you should pay 240/= if you make a one minute phone call, yes? Not necessarily.  The other day I was on the phone to an MTN number for 11 seconds and I was charged 576/= (52.36/= per minute).  Then I made a second call to the same number a couple of minutes later which lasted 10 seconds. I was charged 240/= (24/= per second). The third call I made, this time to a different number lasted 1.02 minutes and cost 504/= (8/= per second).

It’s confusing to the customer and, with the level of financial sophistication in Uganda not exactly helped by a so-so education offering, it is easy to see how most customers will not be able to figure out what exactly they are being charged on each phone call they make.

Airtel Arsenal “offer” seems designed specifically to encourage gambling

If I was expecting to pay 44/= for an 11-second phone call that I paid 240/= for, where did the 196/= go?  If that were to be replicated a million times a day (Airtel boasts way more than one million customers),  what would that mean to Airtel’s bottom line? Could they possibly make more than 196,000,000/= ($73,400)  if this happened to one million customers in one day?

Is that how Airtel can afford to “give away” 5m/= ($1870) a day on television game shows as well as make all sorts of seemingly great offers to their customers? Why does it seem to me as though the customers themselves are already paying for all those ‘offers’ in inscrutable, confusing, opaque tariffs?

Airtel also has all sorts of enticing packages such as 20,000/= for “free” Airtel to Airtel  for an entire month. Exciting deal? Seems so until you apply it in practice.

If you load 20,000/= of the Airtel to Airtel package, you can make those calls for 30 days without paying anything extra. So, if you run out of Airtel-to-other-networks airtime, you can still make Airtel-Airtel calls. So far so good.

Now, if you load 10,000/= of Airtel-to-other-networks airtime, you might get a bonus of 5,000/=. But if you still have the Airtel-Airtel package, something interesting happens: the Airtel-Airtel free calls stop being free and their cost will be deducted from the bonus you received when you bought Airtel-to-other-networks airtime! Until the bonus runs out, your free Airtel-Airtel package is basically suspended. In other words, Airtel raids your Airtel-to-other-networks bonus for Airtel-Airtel calls that you have already paid 20,000/= for!

How the bonus airtime tariffs are calculated is a mystery, too. Suffice it to say that they are charged as haphazardly as the non-bonus tariffs.

Huh? What’s that again? No, they never took me off the bonus scheme and so they never responded

Now, try asking Airtel personnel why your bonus is being used for Airtel-Airtel calls when you have already paid for them. First you have to run the gauntlet of their disorganized customer service centers where they can’t even get right the queuing system. If you persist, you will speak with polite, empathetic Airtel officials who, however, don’t deliver on their commitments.

I persisted for about a month until I gave up when it became clear that, despite their fine words, they weren’t interested in resolving the issue. Take it or leave it was the tone of  the last e-mail the Airtel official sent me. So, I decided to leave it, and now longer subscribe to the Airtel-Airtel scheme since it seems like a swindle to me.

Their e-mails are either deliberately written to obfuscate, or someone at Airtel needs to figure out how to communicate with customers in a simpler style.

Yet another promise not fulfilled

Some months ago, I sought out a radio talk show host I know, asking that I go on his show to talk about the telecom companies’ incomprehensible charges to customers. He didn’t mince his words. Telecom companies are so powerful, and radio stations are so beholden to them for advertizing shillings that they couldn’t say or bring on anyone to so much as question their business practices, he told me. That makes MTN more powerful than the president of Uganda – quite a feat for a company that is so divested in Uganda that it could shut down in exactly a day and return to South Africa.

MTN, too has its share of public complaints

So, how can you prove whether the tariffs you are being charged are as advertised? If you are a prepaid (pay as you go) customer, you can’t.  The simplest way would be to ask for a transcript of your phone calls but in Uganda the telecom companies don’t have to give you anything unless you get a court order.

What’s left is what I resorted to: made phone calls over a time and monitored the duration and cost. What I gleaned seems damning but it would be totally useless anywhere beyond this blog as I cannot back it up with any verifiable record. That seems to suit Airtel and the other data and voice service providers just fine.After all, if you can’t get a verifiable record, how can you question their business practices?

Why bother with barrier ropes and proper lines if you can make your customers mill around idly?

It is nonetheless curious that it is now much cheaper for Airtel customers to call India, Bangladesh, Canada or the United Kingdom than it is for them to call within Uganda. That sounds suspiciously as though the Ugandan customer calling his mother across town is subsidizing those who make international calls (what some might call preferential treatment) but, again, I can’t prove it.

Finally, did you know that, like the OPEC cartel, the big Ugandan telecom executives regularly meet to discuss tariffs and what they can do about them so that their respective companies all stay profitable?  Next time you wonder why they all charge about the same calling rates even though their customer base and numbers vary widely, do remember that.

PS. I sent an e-mail to Airtel, asking them whether they had any comment/clarification before I posted this. They sent me an e-mail that their “PRO” would get back to me. S/he hadn’t by the time I went to print.