Relief in sight for ripped-off consumers

A notice published in the Government Gazette last week indicates that Icasa intends to regulate data expiry. Legalbrief reports that this follows an ongoing dispute between cash-strapped consumers and networks over exorbitant data costs. Until now, unused data bought in bundles has expired at the end of the month of its validity. Icasa plans to make the practice illegal, requiring the operators to warn their customers when either data or airtime use has reached half, three-quarters, 90% and 100% of their allocated bundles. The latest step by Icasa to join the #DataMustFall campaign was aimed at regulating data expiry dates, according to the notice. The communications authority wants to amend the end-user and subscriber service charter regulations by introducing ‘out-of-bundle billing practices’ and other ‘expiry of data practices’. A report on the Fin24 site notes that Wilmari Strachan, director of technology, media and telecommunications at law firm ENS Africa, said that these regulations will ‘govern’ the validity period and roll-over of data. ‘For instance, data bundles of 1GB to 5GB must remain valid for 90 days. Bigger data bundles, such as 20GB and more, must remain valid for 24 months.’ The regulations also provide for end-users to have an option to roll over unused data before the expiry date. ‘If introduced, these regulations will certainly affect the business models of many electronic communications service providers,’ she said.

Full Fin24 report

Vodacom said it will actively participate in Icasa’s consultation process on the draft regulations regarding data expiry periods and out-of-bundle billing. Vodacom reportedly told Fin24 that it was committed to the process of drafting new regulations, after the communications regulator stepped into the feud between consumers and networks over the high cost of data. ‘Vodacom is committed to bringing down data prices and has brought down effective data pricing by 44% over the last three years,’ a company spokesperson is quoted in the report as saying. The public has until 19 September to submit comments. The regulator had previously announced it would hold an inquiry to try to reduce high data costs. The inquiry will be conducted over four phases and completed in March 2018.

Full Fin24 report

In a Tech Central analysis, Duncan Mcleod notes that when Icasa cut mobile call termination rates – the per-minute charges operators levy on each other to carry calls between their networks – there was a significant flow-through of benefits to end users. Smaller operators Cell C and Telkom could take advantage of the lower charges to compete more effectively on price with their bigger rivals, Vodacom and MTN. A price war ensued, and today South Africans are paying much less, on average, for voice telephony than they did just five years ago. He notes that while Icasa made a mess of crafting the regulations, the 90%-plus reduction in the wholesale rates over the past half a decade or so has led to lower retail prices. ‘There is now mounting pressure on the regulator to do something similar when it comes to data – to deal with (perceived) high prices and aggressive data expiry policies by the operators. In the first of a series of planned interventions, Icasa last week published draft regulations dealing with data expiry. The move has been widely welcomed by consumers, but the intervention warrants caution and careful interrogation because there’s a danger that it could lead to unintended consequences, including higher prices.’

Full column on the Tech Central site

And analyst Arthur Goldstuck believes that the problem with the draft regulations is that they do not address the fundamental flaw in the structure of data pricing in SA. In a BusinessLIVE column, he points out that, for the first time, operators will be barred from ‘expiring’ data for a specified period. ‘The regulations make a good start, but only if the intention is to provide an initial framework. Yes, it is a draft, but draft rules usually reflect the extent to which a regulatory body has applied its collective mind. If that is the case, a bruising battle may lie ahead. The problem with the draft regulations is that they do not address the fundamental flaw in the structure of data pricing in South Africa. As presented now, they would allow the operators to continue punishing the poor for being poor.'

Full analysis on BusinessLIVE site