Wednesday,18 July, 2018
Current issue | Issue 1363, (5 - 11 October 2017)
Wednesday,18 July, 2018
Issue 1363, (5 - 11 October 2017)

Ahram Weekly

More costly conversations

A 30 per cent decrease in the value of prepaid mobile recharge cards has been met with anger by consumers, reports Ahmed Morsy


90 per cent of mobile users in Egypt will be affected by the decision
90 per cent of mobile users in Egypt will be affected by the decision

Maha Ibrahim works as a domestic help, cleaning a different home every day. She depends on her mobile phone to communicate with her employers and in order to confirm her appointments. She was shocked to find when buying an LE10 card this week that it would give her only LE7 worth of calls.

This is due to a decision by Egypt’s National Telecommunication Regulatory Authority (NTRA) last Thursday raising the prices of mobile recharge cards. The decision led to a 30 per cent decrease in the value of purchased cards for the pre-paid lines, leaving their face value unchanged but lowering the number of minutes accessed by the cards.

“This means I will have to recharge more often,” Ibrahim said. “Thank goodness I do not have a smart phone and am not an Internet addict. Otherwise, this would have been very costly for me.”

Ibrahim is not alone in her predicament. Egypt has over 100 million mobile phone lines. Around 90 per cent of those are pre-paid.

“The authority agreed to increase the prices of the mobile recharge cards due to high operating costs,” Mustafa Abdel-Wahed, acting president of the NTRA, told the state news agency MENA.

He attributed the increase to requests from operators and added that the customer would now access 70 per cent of the price of the recharge cards. For instance, the LE100 recharge card now gives LE70 in credit instead of LE100 prior to the decision.

However, while subscribers had to pay LE110 previously for an LE100 recharge card, they no longer have to do so and will only be required to pay the sum printed on the card. Additionally, the mobile companies have announced a cut on the monthly pre-paid mobile calling plans. For instance a plan that used to cost LE92, will now cost LE80, a 13 per cent discount.

In response to the price increase, calls to boycott mobile operators in protest have spread on social media. “The problem is with us because we barely make any noise when the prices of goods and services increase. We will now put pressure on the companies to cut their prices,” wrote Mohamed Sayed, a social media user who participated in the boycott campaign.

Another boycotter, Ahmed Abdel-Ghani, wrote that he “will limit the use of my mobile in order to affect the profits of the companies”.

Parliament’s Communication and IT Committee and the Chamber of Commerce’s mobile and communication division were not happy about the increases either. Many of the committee’s members expressed their rejection of the decision, emphasising that they had called the minister of communications for a briefing.

Mohamed Al-Mahdi, deputy head of the Chamber of Commerce’s Mobile and Communication Division, submitted his resignation on Facebook as a way of expressing his dissatisfaction at the lack of prior consultation.

The price hike coincided with the official launch of 4G services for mobile operators in Egypt and of the fourth mobile network. State-owned Telecom Egypt, the incumbent landline operator in Egypt, is Egypt’s fourth operator under the brand name We, competing with the three others — Orange, Vodafone and Etisalat.

We launched new promotions for its new customers following the increase in the price of the recharge cards, giving users the 30 per cent the other operators had discounted from the value of cards.

The promotions by We prompted social media users to widen the boycott campaigns to include the new company. “This is a conspiracy. The authorities raised the prices of the recharge cards, only letting the state-owned company [We] make promotions to increase its market share,” Mariam Osama, one of the citizens joining the boycott, said.

NTRA has rejected a proposal from Vodafone, Orange and Etisalat to launch a promotion in which the companies would bear the 30 per cent reduction to match the same promotion from We, a source who preferred to remain anonymous told Al-Ahram Weekly.

“It is acceptable that a new operator needs to launch special offers to attract new clients, but it should do so without wrecking prices in the market,” the source said.

The source also refuted the NTRA’s claims that the price increase was a result of operator demands, saying that “our proposed price adjustment was rejected by the NTRA.”

The increase is the second seen in the market this year. In July, the VAT on recharge prices was increased from 13 to 14 per cent. The government shifted from a sales tax to a VAT tax for goods and services in September 2016.

The recent change in prices has been confusing for all parties. Although the NTRA has said that the price hike applies to all unsold cards on the market, some of the cards still have their full value.

The Weekly bought a new recharge card and found that it contained 100 per cent of its price, prompting some to think that the NTRA had cancelled the decision in response to the boycott campaigns.

Sayed Azzouz, deputy head of the NTRA, said in a press statement that there would be no return to the old prices. Sources at the three mobile operators told the Weekly that the old recharge cards would soon be updated and registered to give the same amount of credit as new cards.

The decision was also confusing to merchants, who are having problems sorting out what price they should sell unsold cards at.

Representatives from the NTRA and the Chamber of Commerce’s mobile and communication division are scheduled to meet in the coming days with representatives of the mobile operators to sort out the confusion.

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