Solavei, the discount multi-level marketing mobile service, raises prices for some, angers users

Solavei.com
Solavei.com

UPDATED with statement from Solavei, below.

Discount mobile service and multi-level marketer Solavei has cut its mid-level smartphone data plan in half, raising the ire of some users who traditionally have been both loyal and aggressive promoters of the service.

Solavei subscribers who now pay $49 per month for 4 GB of high-speed smartphone service received an e-mail in the past several days from the firm alerting them that their high-speed data usage would now be capped at 2 GB.  Those who want to maintain the same service now must pay $69.

“Your recent data usage averages more than 2GB per month,” read one of the e-mails. “As a result, we highly recommend that you upgrade to the next service plan level to continue enjoying high-speed data up to 4GB per month. You can also reduce your data usage by using Wi-Fi at home or work if you stay on the new $49/month plan.

Some Solavei users expressed a lot of anger on the firm’s message boards. “This is a total bait & switch. Bye bye Solavei,” wrote one.

Another argued that Solavei should have “grandfathered” users who signed up in the past, and charged the higher prices only to new users. “To do otherwise is simply them cheating those who signed up for what was advertised all over the place (by members) as a $49/month UNLIMITED DATA plan,” wrote that user. “I am very disappointed in Solavei for not DOING THE RIGHT THING and grandfathering in those who signed up for the deal that persuaded them to join, buy a phone, etc.”

Solavei customers don’t sign contracts — that’s part of its appeal — so the company is free to change prices and other terms and conditions. Solavei is unique among mobile providers. As many discount long-distance phone service firms in the past, Solavei encourages user to sign up others, and offers them discounts or cash for the sign-ups — a traditional multi-level marketing format.

Inspired by that opportunity, some Solavei users have marketed the service aggressively. That’s probably why you’ve heard of it; you’ve probably received an e-mail or seen a Facebook comment about it.

Some users defended Solavei on its message boards, saying the changes include expanded, discount low-bandwidth options which would allow them to sell the service to consumers looking for $29-a-month plans.

The Bellevue, Wash. company says it has 250,000 users. The price change comes only weeks after the firm announced it would expand its multi-level opportunities. It will soon permit users to sell thousands of products to their consumers, an Amway-style expansion that could make it lucrative for some users. That also makes them less likely to jump ship to a less expensive smartphone service provider.

While Solavei does offer unlimited data through its pricing, it downgrades service after users hit their high-speed bandwidth caps — a tactic that’s typical  among mobile providers.  The downgrade to 2G level speeds can be punishing however; it’s unlikely users can watch video after their downgrades, for example.

A spokesman for Solavei sent a comment arguing that most users will pay the same amount, and have the opportunity to pay less, after the change.

“We now offer our members even greater choice and value with the introduction of our new rate plans – and with these new rate plan, we’ll be passing along millions of dollars in savings to them,” the statement reads. “We originally offered only one plan, $49/month, with unlimited voice, text and 4GB of high-speed data. As we reviewed our user data from over 250,000 members since launch, a vast majority used less than 2GB and even more importantly, 50 percent used less than 500MB of data and another 20 percent of our members use no data at all, which they will now be saving $10 and $20 per month. With our new rate plans, over 75 percent of our members will pay the same amount or now have the opportunity to reduce their monthly bill even further.”

 

About Bob Sullivan 1399 Articles
BOB SULLIVAN is a veteran journalist and the author of four books, including the 2008 New York Times Best-Seller, Gotcha Capitalism, and the 2010 New York Times Best Seller, Stop Getting Ripped Off! His latest, The Plateau Effect, was published in 2013, and as a paperback, called Getting Unstuck in 2014. He has won the Society of Professional Journalists prestigious Public Service award, a Peabody award, and The Consumer Federation of America Betty Furness award, and been given Consumer Action’s Consumer Excellence Award.

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