October 25, 2014
Mobile phone rates rise
Movistar, Claro and Personal increase pricesClaro, Movistar and Personal, the main mobile phone operators in the country, implemented rate hikes for their clients between nine to 18 percent, a figure that changes according to the plan. While companies promised more investment to improve their networks with the extra funds, the government criticized the increases saying they did not have the necessary authorization by regulators.
This happens a month after rates had also been jacked up due to a new scheme implemented by the Communication Secretariat, according to which clients are now charged by the second and not by the minute. The Herald analyzed the situation and it concluded calls were even more expensive than before with the new system.
“Even though mobile phone companies can establish their own prices in order to have a real competition, they have certain obligations regarding prices and plans,” Communication Secretary Norberto Berner said in a press release. “The current regulation says they have to inform of any changes on their prices 60 days before implementing them.”
Berner also questioned the argument of companies tying the increase to more investment by saying “the quality of the service is not sufficiently good in order to raise the rates of mobile phones.”
Movistar raised prices of pre-paid plans 12 percent on average, leading to an increase in the cost of a minute from 2.90 to 3.30 pesos and the text message from 0.77 cents to 0.85 cents. Free calls to other Movistar clients didn’t suffer any changes.
At the same time, no increases were announced on the other plans the company offers, which were increased an average 7.2 percent at the end of 2013. Nevertheless, free calls to other Movistar clients will start being charged for “old plans that are not currently sold by the company.” This affects 23 percent of the company’s clients.
“Movistar still has the lowest prices on the market and maintains deals to double or triple pre-paid cards. With these changes, we will equal the price our competitors had last year,” sources at Movistar told the Herald. “Telefónica will invest 11.743 billion pesos in the next few years, focusing investments in the expansion of our telecommunication networks.”
A same scenario was seen on Personal, company that will raise some of its fixed-rate plans an average 13.2 percent since April 13. There was no change in the price of pre-paid plans, which haven’t been increased in the last 14 months, according to the company, which highlighted the investment made last year.
“Our price structure is based on a scheme that boosts benefits for our clients, leading to the rates they pay being much lower than the one initially stated,” sources at Personal told the Herald. “Last year the company invested 4.851 billion pesos, 48.9 percent more than 2012, which were destined to widen our network. We are facing the challenge of improving the quality of mobile phone services.”
Rate hikes were also implemented by Claro. While new plans remain at the same value, clients of some fixed-price plans saw this month an average 12 percent increase since text messages and Internet services started being charged extra and are not included any more in the initial price. For example, a 160 pesos plan now costs 180 pesos due to an extra 10 pesos for Internet and an extra 10 pesos for text messages.
“Claro hasn’t announced any price increases and, as usual, any changes are previously informed 60 days before implementing them,” sources at Claro told the Herald.
A change of scheme
Mobile phone calls were supposed to cost 30 percent less as a direct consequence of a new scheme imposed by the federal government on companies, according to which clients are now charged by the second and not the minute. Nevertheless, the characteristics of the new scheme made calls even more expensive than before.
The Communication Secretariat’s regulation created a new charge “to establish a call” of between 0.84 and 1.21 pesos, which have to be paid by clients for the first 30 seconds of the call even if its duration is less than that. After that period, companies charge between 0.012 and 0.02 for each second of the call. That means that the time-period of 31 to 60 seconds costs between 0.36 and 0.60 pesos.