Haaretz 6-12-2012
New phone deals may not be bargains
Bundling mobile, landline, Internet looks into a single package with one price is enticing – until the first year is over and they start looking more expensive.
Anyone who has watched Israeli television over the last couple of weeks couldn’t have missed the heartrending new Cellcom advertising campaign featuring the emotional family reunion of an Israeli women soldier and the arriving relative from Ethiopia who had not seen her since she was a small child.
The soldier sports a purple beret which, rather than having any military significance, may just be homage to the purple color scheme associated with the Cellcom brand. The ad campaign, which cost the company NIS 5 million, promotes Cellcom’s “Total” communications package, which the advertisement suggests also reunites families.
The three largest communication groups in the country, Cellcom, Bezeq and its Pelephone subsidiary, and Partner, which does business as Orange, have found a way to stand up to the stiff new competition in the cellular service field.
New cellular firms swept into the market earlier this year offering substantially lower prices, although some of the packages feature consumer pitfalls. Most importantly, it may be cheaper to purchase the components of the package separately from various service providers.
Big three fight back
The big three are offering what upstart cellular firms like Golan Telecom, Rami Levy Communications can’t: one-stop communications packages that include landline home phone service, cellular service, and Internet access. Some of the packages also include international long-distance calls. The inclusive packages make it possible for the companies to obscure the price of each component of the package if sold separately – particularly cellular service – and also give them the chance to sell customers additional services.
This week, Bezeq launched new options that include cellular service through Pelephone together with a Bezeq landline and Bezeq Internet access. Unlike the other two major communications firms, Bezeq is subject to stiffer regulatory oversight as a telecommunications monopoly, which requires it also to allow customers to pick and choose which components of the package they wish to buy. Packages range in price from NIS 199 to NIS 389 per month for the first year. [See diagram].
Cellcom’s Total plan is the most prominent inclusive package on the market. The company says it has 100,000 customers on the plan, which costs NIS 349 per month and includes three cellular lines, a home telephone line through its 013 Netvision division, international long-distance service and Netvision Internet service.
Partner sells its own competing package, called Clear Double Unlimited, at NIS 319 per month for the first year, which goes up by NIS 14 per line after that. It includes two cell phone lines with unlimited talk time and texting, one gigabyte of cellular Internet access and a home telephone landline.
Hot subject to controls
Cable television service provider HOot is subject to regulatory controls like Bezeq. It’s allowed to bundle Internet access and a telephone land line with cable television service, but it is not allowed to include cell phone service in the package other than as a service that can be purchased separately. Its plans range in price from NIS 189 to NIS 298 per month.
The cellular firms have sunk major funding into promoting the new packages as a way of convincing customers not to switch companies and as a marketing tool to sell customers additional services. And many clients are attracted to the plans either for their prices or because of the convenience of a one-stop communications company that provides all their needs.
The new inclusive packages are not without their potential problems, however. Customers are advised to check carefully what they are promised and more importantly which services might be missing. Cellcom’s Total package, for example, does not include Internet infrastructure, the actual connection to the Internet, which is roughly another NIS 80 per month for those who don’t already have it from another supplier. The Partner package doesn’t include the infrastructure or the services of a specific Internet service provider, which together cost another NIS 40 per month.
Prices jump after a year
Consumers should also make sure they understand how long the price they are promised will be in effect. The Bezeq plan that includes one cellular line, for example, is NIS 199 per month for the first year but then jumps to NIS 285 per month. Although Bezeq customers have no obligation to stick with the package, many people in such circumstances don’t notice that the introductory offer has ended.
A third pitfall is plans that require the customer to purchase equipment. Partner’s Clear plan, for example requires that customers purchase a special Internet router, which not only costs an additional NIS 14 per month, but also creates a longer term obligation to the company in that it requires customers to complete the monthly payments on the router even if they decide to switch to another company. Similarly Cellcom’s Total plan requires the purchase of its Netbox router.
As noted above, consumers cannot pick and choose which component in an inclusive service packages being offered by Cellcom and Partner they wish to buy, and attempts to change the components in the package can increase the price.
Finally, and most importantly, it may be cheaper to purchase various communications services from a range of companies, for example, by getting cell phone service through a less expensive provider such as Hot Mobile or YouPhone and then separately purchasing landline telephone service and Internet service elsewhere.