"Do you feel you're paying too much for cellular service?" That was the subject of an email TheMarker reporters sent out last week, asking their friends and acquaintances to volunteer their personal information and information on their bills. Why? So we could open negotiations on their behalf with their cellular services provider and improve the terms of their package.
We sent these letters to people who make average use or less of their cellular phones. In Israeli terms, that means they talk 400 minutes a month or less. Yet at the end of the day, they pay NIS 150 a month or more.
Our underlying assumption was that these are the customers who have the most bargaining power with the veteran cellular triumvirate given the changes in its business environment. For one thing, the regulator has been busy: So-called "exit fines" - a heavy penalty for prematurely terminating a cellular service contract - have been outlawed, and the companies were forced to slash their mobile termination rates. Additionally, competition has suddenly reared its head, in the form of Rami Levi Communications.
Our purpose was to show how much consumers can save with a little patience and a lot of haggling. But as we went about our mission, we were surprised to discover something else: that our friends and acquaintances generally still belonged to archaic pricing plans.
Despite the intense media coverage of the cellular industry, it turns out that people don't always read their bills. They don't know what they're paying for. Some were still forking over 98 agorot per minute for calls, compared with an average of 49 agorot per minute among household (not corporate ) customers. They feel it's up to the companies to nudge them onto better paths.
"How can it be that I'm paying a shekel a minute and nobody said boo when I called the mobile operator's hotline last time?" one asked, adding that when he'd joined the plan, it had been considered a good one. Another said his provider had been raising the price over time and it hadn't occurred to him to negotiate. He's still within his commitment period, he added, so there was no point in trying to improve his terms.
All, however, had one common refrain: "I don't understand these things."
Be that as it may, for the sake of our experiment, we joined forces with the price comparison website Kamaze. Liat Nahum, representative of Kamaze, handled the negotiations with the various companies' hotlines and gave us the results.
If any of our friends and acquaintances wanted to take advantage of the offer the company made him, we went back to the companies to get the deal put into force. It was not rare for new demands to arise during this second conversation with the company.
In one case, for instance, the company suddenly demanded a NIS 39 "start-up fee" for switching usage plans. In another case, the company representative asked us to give her the details of the customer-retention plan offered to us.
All in all, we carried out negotiations for nine people and came up with much the same results: In most cases, we managed to lower the users' costs by switching to plans better suited to their needs at the same company. In three cases we found that the best deal was simply to switch to Rami Levi Communications, though only one of the nine decided to follow that advice.
Generally speaking, we achieved savings of 29% to 67% in the customers' bills, saving them NIS 23 to NIS 120 a month. Here we tell three of the stories that best exemplify the process, along with tips on how to negotiate, courtesy of TheMarker and Kamaze.
First of all, you need to be clear on your phone usage pattern. In some calls, the company representatives resorted to inaccurate descriptions of usage patterns that would better suit their offering. "Your monthly bill comes to NIS 300 a month, so I'm cutting that in half," one of the representatives told us. But actually, the amount she stated was only true of the last month, when the client had been abroad and therefore paid more.
Know your options. The threat "I'm going to switch to Rami Levi" doesn't suit every situation. Rami Levi's new cellular offering is appropriate mainly for light users. The billing system is simple, so if you know your usage pattern, you can easily calculate what your costs would be.
A word to the wise: Getting angry and thumping the table won't work here. "The clients need to know what usage plans are out there, and show that to the representatives," Nahum said. "The more they know, the better the deal they can get." In any case, when haggling with a company, do it with their customer-retention department.
Don't agree to one-time payments. Switching usage plans within a company shouldn't cost you money - not fines and certainly not "start-up fees." Putting you on a different usage plan only involves entering data on a computer. It is your right to demand that a professional company worker transfer you to a plan that suits your usage pattern.
Ask what the name of the offer is, for the sake of future reference, and make sure the offer is up to date. At the end of your conversation with the company representative, make sure he enters the outcome in the computer system so the next time you call, the information is there. In one case, we had to tell the company representative that we had taped the first conversation to get him to implement the offer made in the original conversation.
Usage pattern: 120 minutes of calls a month, no texting, no surfing.
Monthly bill: NIS 118 on average, plus NIS 60 a month in installment payments for two old phones bought from the company in the past.
Result: Switched to Rami Levi, at 20 agorot a minute plus a NIS 15 a month subscription.
Monthly savings: About NIS 79 (67% ).
E., a 70-year-old man, has been paying NIS 60 a month for years for two simple LG handsets. He thought that because of a NIS 25 a month refund, it didn't pay for him to switch providers. If he'd studied his monthly bill, he'd have seen he was paying 98 agorot a minute on average for calls, after the refund.
The Pelephone representative's answer to our demand that it lower his bill was surprising: "The system has already identified a plan structured specifically for the client, a package of 400 minutes: 200 calls to Pelephone clients and 200 to all destinations, plus a package of 200 text messages, all for NIS 125 a month."
Given his actual use, that plan is tantamount to unlimited use and does not meet his real needs in any way. In fact, it would increase his costs by NIS 7 a month.
In an online chat with a Pelephone representative, we said we'd move to Rami Levi. We and showed him our calculation that even if we continued to pay for the phones each month and didn't get any refund, we'd still pay much less.
To that, the representative said, "The difference is only NIS 56.30 a month. We must stress that with us, beyond lowering monthly costs, there's a broad range of services that you can't get from Rami Levi: laboratory repair services, a broader range of advanced phones, leading content services and more."
E. doesn't surf or use content services. He doesn't want an advanced phone. We told the Pelephone representative that as far as we were concerned, the offer wasn't professional.
"I understand you, but I gave you the facts, to show exactly what you'd get at the rival network," he replied. "Take into account that with Rami Levi, there will be no repair service, which is critical to owning a phone these days; there will be no surfing at the same speed, and more. I think it would be a mistake even for a client who only talks 100 minutes a month to forgo all the advantages for a difference of NIS 56."
Usage pattern: 415 minutes of calls a month, 70 text messages, no surfing.
Monthly bill: NIS 215 on average plus monthly payments for an iPhone, which the company refunds in the cellular bill.
Result: Switched to the "Shaveh B'Cellcom" plan, which gives 400 call minutes and 400 text messages for NIS 149 a month; retained refund for iPhone monthly payments.
Monthly savings: NIS 96 (43% ).
The customer is a student with an iPhone bought through Cellcom. He doesn't surf using his phone and doesn't want to. Studying his bills for the last six months showed that his existing package, of 400 call minutes a month for NIS 175 (for three months he was eligible for a benefit that worked out to NIS 15 a month ) was too small for him. Calls beyond the quota cost him 60 agorot a minute.
In fact the sums he was paying because of calls beyond the quota were equivalent to a plan for 1,200 call minutes a month, 1,200 text messages and a surfing package.
"I see he's a student," the Cellcom representative observed. "Is it alright to suggest a plan that isn't for students?" We agreed to accept any plan that would lower his monthly outlay.
At first she offered a package of 500 minutes a month and 500 text messages for NIS 205. We didn't think that was a good offer and pointed out that he'd be paying much more per month than he was now. We asked for an offer from the customer-retention department.
The customer-retention representative offered a plan for 400 minutes plus 400 text messages and unlimited surfing for NIS 179 a month, plus NIS 20 a month back throughout a year, meaning he'd still get his iPhone installment refunds. "Are you offering the Shaveh B'Cellcom plan?" we asked. She was surprised that we knew the plan's name and said it wasn't.
We asked for something cheaper. And got it: 400 minutes plus 400 text messages and no surfing for NIS 149 a month, plus NIS 20 a month back throughout a year for the iPhone.
Usually, the companies charge separately for phones: The customer pays over 36 months, but gets all the money back through the bill. So if he pays NIS 70 a month for the phone, the monthly bill will be credited by NIS 70 a month as long as he stays with the company.
But sometimes, if the customer switches plans, the monthly credit may not switch with him. So make sure it does.
Usage pattern: 290 minutes of calls a month, 40 text messages, no surfing.
Monthly bill: NIS 250.
Result: Switched to Orange Clear plan with 450 call minutes plus 450 text messages and surfing for NIS 179 a month, and NIS 49 a month back for a year.
Monthly savings: NIS 120 (48% )
A glance at the customer's monthly bills showed he was paying 75 agorot a minute for calls or text messages. The customer was frustrated with the height of his monthly outlay but thought switching plans would involve fines. He didn't know that the companies have been banned from charging early-termination fees, or that switching plans should involve no penalty at all.
Also, he wanted to buy a smart phone and wanted to stop using the phone in his car, on which he talked 100 minutes a month; the car phone service was provided by another company. So we asked Partner Communications, which operates under the Orange brand name, for a plan involving 400 call minutes a month, 50 text messages, surfing and a smart phone.
The solution turned out to be perfectly simple. The customer's plan was an archaic one, and switching to one of the plans touted on the company's website proved to give him more service for less money.
Under the new plan, the customer gets 450 call minutes plus 450 text messages and surfing for NIS 179 a month, and NIS 49 a month back for a year. That's NIS 70 a month less than he had been paying. The refund for a smart phone came to NIS 49 a month, so the final bill is NIS 120 a month less than he had been paying, without including the savings from disconnecting the car phone.
At the end of the conversation, the service representative added that he had to pay a "start-up fee" of NIS 39. We refused to pay it. She said she'd check if it was possible to forgo the payment, left us on hold for a minute, came back and said, "Okay. I canceled the start-up fee."
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