Business News of Monday, 26 November 2012

Source: myjoyonline

Vodafone Faces Possible Class Action Over Capped Broadband Package

Vodafone Ghana has since two months ago increased the price of its domestic fixed broadband package from GHC45 to GHC65 and announced a cap of 15GB for the 30-day period beginning November 28, 2012, but some customers are angry about the move and could go to court.

The customers, led by one Francis Adanku, have opened a dedicated Facebook account to invite all aggrieved customers to sign on to a protest, which could become a class action against Vodafone for putting a cap on the domestic monthly package after increasing the price by almost 50%.

The Facebook account captioned “Stop Vodafone from Capping Broadband” has so far attracted some 2,280 members, out of which 387 have signed on to the class action so far.

Adanku told Adom News they are going to get as many aggrieved customers as possible to sign on to the protest and they will then petition the industry regulator, National Communication Authority (NCA), and Ministry of Communication (MOC) to prevail upon Vodafone to stop the announced cap.

He said if that fails, other options, which may include legal action could be considered.

Some of Vodafone FBB customers had earlier on written Adom News saying they simply cannot understand why the package was GHC45 when it was uncapped, but it has rather been capped after the price increased to GHC65.

One of the customers said “I consume at least 30GB a month for downloads alone, plus more for live streaming and browsing - I do not have any qualms about the price increase because the download speeds is now better – but why place a limit on how much data I can consume after increasing the price.”

Meanwhile, on Facebook, Adanku wrote that “The new packages starting from 15GB valid for 30days @ 65Ghc from the previous 45Ghc for unlimited data will make it extremely difficult to freely use services such as Youtube, Skype, Facebook, Uploading of pictures and downloading of programs, movies, pictures and attachments.”

He said that would negatively affect and widen the digital divide which all Ghanaians have been working so hard to completely eliminate.

He also noted that Vodafone is selling 60GB for GHC200 as business package, which Adanku argued is too high because “in the UK and Italy, 16megabits/sec unlimited data is less than 40euros (GHC96.04). Vodafone says it is doing up to 20megabits/sec but in practice it is 4-5megabit/sec.

Adanku said customers have had to resort to open protest because when they post questions and concerns about the cap and increased prices on Vodafone’s Facebook page, the company deletes them and refuses to offer any responses.

He said they fear that if Vodafone is allowed to implement the capped system on November 28, 2012, it would be difficult to reverse, so they would push the regulator and government to intervene before then.

Vodafone Plays the Fairness Card

But in an brief interaction with senior journalists recently, the Vodafone Ghana CEO Kyle Whitehill said the customers who are complaining about the cap and increased prices are the one per cent of customers who consume 99% of available capacity and pay as little as what everybody else pays.

He said an overwhelming majority (more than 80%) of Vodafone’s domestic customers consistently consume less than 10GB of data a month, but the experience of those overwhelming majority of customers, in terms of internet speeds, is adversely affected by those who consume huge capacities, even though they are all paying the same amount.

Whitehill explained that over the past two and half years, Vodafone's fixed broadband customers have increased from 5,000 to 79,000 and even though the company has invested GHC50million to improve the network to accommodate them all, it has also become necessary to manage the system efficiently to ensure that every customer got great experience.

“The cap is therefore a strategy deployed to ensure efficient management of the system by reducing the number of people who consume high capacities for less so that more capacity would be freed to boost the experience of the overwhelming majority,” he said.

Whitehill also explained that even though Vodafone has placed a 15GB cap on the domestic package, its offers are still the most competitive on the market, and the company still offers the highest speeds on the market, which is actually one of the fasted in the world.

Vodafone has often been accused of playing player and referee, and adopting practices aimed at killing Internet Service Providers (ISP) who buy bandwidth from Vodafone, just so it could capture their customers unto the Vodafone network.

The accusers now argue that Vodafone used the uncapped packages at GHC45 as bate to attract the customers of other ISPs unto the Vodafone network, and are now in the line to squeeze them with the capped package at an increased price.

Indeed, the Vodafone Ghana CEO recently stated ISPs in Ghana are no more competitive because they are using obsolete and expensive technology to offer expensive service, so they could not blame Vodafone for their gradual loss of business, a position that Director of Regulatory Administration at the NCA, Joshua Peprah shares.

Meanwhile, if things remain as they are now, without the swift intervention of the regulator and government, beginning November 28, 2012, all new customers on domestic package of Vodafone’s FBB would have a 15GB cap on their monthly packages, and existing customers would also be affected by the cap from December 16, 2012.