by ALBERT BRANDFORD

GOVERNMENT is being urged to keep its hands off pre-paid cellphones which, according to a household sample survey by a prominent non-governmental organisation (NGO), are used by 97 per cent of residents in a low-income community.

Following Prime Minister David Thompson's Budget impost this week of a monthly $4 tariff on all of the estimated 290 000 cellphones – effective October 1 – to help fund education and training, the NGO suggested any levies for pre-paid accounts should be on service providers "since they are already collecting largesse from pre-paid accounts".

"Pre-paid customers pay a higher rate than post-paid," said the Barbados Association of Non-Governmental Organisations (BANGO), "even though paying in advance. Paying in advance is a premium because it helps them with their cash flows, whereas they have to wait for payment from post-paid customers.

"These premium customers are not treated with any hospitality. In most business practices, the premium customers are the ones that get the discounts. Why is it the opposite for the premium customers of the cellphone providers? Furthermore, when their debits expire they are abruptly cut off even if on a call."

BANGO secretary general Roosevelt King said its survey, done in Bayville, St Michael, to provide information relating to the revision of the Telecommunications Act – specifically for making recommendations about the collection of the proposed Universal Service Fund – found that 97 per cent of that low-income community had pre-paid accounts, while the market summary showed that pre-paid customers were already saddled with 57 per cent more charges than post-paid customers for the same unit of time. (See accompanying tables)

The survey showed that from a sample of 34 households, 29 paid $6 379.37 for telecommunications services monthly – an average of $219.98 per household. It also showed that some people, even though in the minority, were prepared to spend a huge chunk of their wages on mobile services, with one household alone contributing about $1 500.

"The extent to which this is harmful to the person(s) or represents a threat to social or economic prosperity should be examined before any judgments on these users are passed," King said. "However, based on the level of wages, the fact that a person(s) would make such a sacrifice for mobile services is troublesome.

"It is noted that only half the population of householders sampled own mobile phones; of the 57 phones, only two were post-paid. For those non-users who had comments on mobile, most felt that it was too expensive. This gives some indication that the mobile market has good potential that can be exploited with good marketing and a lowering of the price on the market.

"Therefore, the fact that this amount is now spent on one type of utility, and given that: (i) the other utilities have also been affected by inflation and the price of oil; and (ii) wages for low income workers have not kept pace with the cost of living, spending on telecommunications seems harsh and the plight of low-income workers needs to be examined in the national interest."

The survey showed that the majority – just over half – of users spent between $50 and $100 per month on their mobiles, followed closely by users spending between $30 and $50 – making up 75 per cent of users.

It said $50 was used as a benchmark set by polling the average user who felt that a cellphone should not cost more than $50 a month.

The responses, however, indicated that one in two people with a mobile phone would go overboard on pre-paid phone cards.

In addition, some users did not mind paying as much as $100, but not every month, and only based on making overseas calls.

The information revealed that the highest amount spent by a household was $1 440; the average was $156.75, while the lowest spent was $10.

Among individuals, the highest spent was $360; the average was $67.18 and the lowest $10.

"The fact that some low-income workers spend as much as $360 on a cellphone is worth probing," King suggested. "The author recognises the existence of the 'cellphone trap' where users are not aware of the different charges incurred by crossing providers and use their cellphones indiscriminately. This huge spike will be examined in future surveys.

"At the other end of the scale, the lowest spenders are those who deprive themselves of the full use of their cellphones by not topping up when their credit is spent, as well as those who use their cellphones to text. The latter are users spending in the range of $10 to $20 a month."

The survey concluded that the average level of spending on telecommunications was "very high" in low income areas, with mobile service outperforming all others, including doubling the landline bill (which totalled $1 820.92 in the sampled area).

It said there were several factors influencing this pattern: (i) There was a time when not having a landline meant you could not be easily contacted but mobile has changed that; (ii) The cost of living includes access, that is, a personal need to be in the information loop; (iii) Even for those with a landline, not having a mobile could be embarrassing, inconvenient and costly; and (iv) No price can be placed on eliminating inconvenience; it is a subjective thing.

King added: "It is this handiness and convenience which is a strong part of the appeal to mobile and indeed the idea of instant communications is part and parcel of the useful application of the technology.

"From this survey, it would seem that more than half the population in the low-income areas is plagued with a high mobile bill, and while it is a question of choice, the decision to purchase a pre-paid card can be telling, causing these users to make a choice between one necessity and another.

"There is no evidence to suggest that these workers receive high wages and for the most part, the wages they receive are not sufficient for them to realise the Barbadian dream, so if they are spending such a huge chunk on one item then it stands to reason that something else in their lives must be suffering," King said.

Meantime, Sara Odle, corporate communications manager with Cable & Wireless, said the company was working through the details of the budgetary proposal.

She added that it "will be sharing more information with our customers in due course".

The other main provider, Digicel, was also uncertain about the inner workings of the new tax.

A representative said the general manager was still waiting on word from Government on how the subscription would be taken from the cellphones.