A study by the Ministry of Communications has found that “minute plans” of the cellular providers, which bill subscribers according to one-minute time increments, do not benefit subscribers. The ministry also found, “In minute plans, 25-40% of the seconds of air-time subscribers paid for was not used.” The ministry said it would hold a hearing on the matter with the cellular companies.
The ministry found that the effective rate subscribers paid under minute plans was significantly higher than the rates paid by subscribers under ordinary billing plans. In other words, each minute cost more, rather than less as they were supposed to.
The Ministry of Communications conducted its survey in May 2006. On the basis of the figures obtained, it found that the extra payments amounted to tens of millions of shekels in annual terms. “In the event that the trend of an increase in the number of subscribers belonging to minute plans continues, the aggregate annual damage to consumers in the long term will grow,” said the ministry.
In view of the finding, the Ministry of Communications is considering abrogating the relevant clauses in the cellular companies’ licenses banning them from billing subscribers in increments greater than 12 seconds.
The ministry found that the cellular companies do not want to provide subscribers with full information and all the conditions of minute plans, but urge subscribers to switch to these plans, even though they cost subscribers more. “The ministry has the impression that the companies are not providing explicit explanations about the significance of the change in billing sections. In other words, they do not explain to subscribers that if they have a conversation that is slightly longer than a minute, they will be charged for another full minute. The ministry believes that a subscriber’s ability to make an informed decision about the billing plan best suited to him is limited. A subscriber cannot obtain sufficient information to compare plans and pick the rates plan best suited to his consumption needs.”
Minute plans were first launched in late 2005, when the cellular companies began offering them to subscribers as part of the companies attempt to make up the cuts in inter-network connectivity charges. The Ministry of Communications says that, while the minute plans were supposed to be “niche plans”, which would be a good solution for a fairly small number of subscribers, these plans instead became the main plans marketed by the companies. “Most of the plans offered to subscribers during the period studied were plans that billed by full-minute segments. At some companies, the proportion of new subscribers joining minute plans exceeded 80%.”
Published by Globes [online], Israel business news - www.globes.co.il - on April 17, 2007
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