Icasa dodges thorny issue of data expiry

The Independent Communications Authority of SA has dodged the highly controversial data expiry issue‚ saying it is the National Consumer Commission’s job to take the necessary steps to force the cellphone industry to allow subscribers to make use of prepaid data for up to three years.

The communications industry regulator published its End-User and Subscriber Service Charter Regulations in the Government Gazette on Monday‚ along with its “Reasons” document‚ explaining how it came to its decisions‚ and summarising the industry’s submissions.

All Icasa has said about its about-turn on data expiry is that it did so after careful consideration of submissions made.

“However‚ the authority is of the view that the [commission]‚ as the custodian of the Consumer Protection Act, should take the necessary steps to enforce compliance [with regard to data expiry].”

In the seven years since the act came into effect‚ all the networks have been adamant that Section 63 – which requires that all prepaid goods and services be redeemable by consumers for at least three years – does not apply to them.

Icasa’s “Reasons” document includes this: “MTN is of the view that Section 63 does not apply to prepaid data bundles as it requires that an end-user be given a period of three years within which to redeem a voucher and not a period of three years to use the services – data bundles – that were made available pursuant to the purchase of a voucher.”

But the consumer commission does not agree.

“We remain of the view that prepaid data should not expire unless three years have passed‚ or the data has been used up‚” spokesman Trevor Hattingh said on Monday.

“The network providers resell that unused data, [which] legally belongs to the subscribers who have paid for it in advance.

“We cannot and will not promote undue enrichment.”

Consumers were entitled to the full value of the data they had paid for‚ Hattingh said.

“If a network is unable to hold onto unused data for consumers for three years‚ they should create a mechanism to refund consumers the monetary value of the unused data at the time of ‘expiry’.”

Vodacom told Icasa 62% of its subscriber base used data bundles with a validity period of under 30 days.

Asked what action the commission intended to take‚ Hattingh said it would be in a position to reveal that by the end of the week.

Meanwhile‚ the Icasa regulations do require the industry to introduce several measures which will protect consumers from high out-of-bundle data prices and data loss to some extent.

From May 30‚ operators will have to send notifications to consumers once they have used 50%‚ 80% and 100% of their voice‚ SMS and data bundles. And consumers cannot automatically be defaulted to out-of-bundle rates.

The networks will also have to provide subscribers with an option to roll over unused data – but Icasa has stopped short of prescribing for how long.

But importantly‚ if unused data is rolled over‚ it must be used before any newly allocated data.

Subscribers must also be given an option to provide unused data to other users on the network.

This is the first phase of Icasa’s data services interventions – a cost analysis that could lead to price regulation is on the cards.

The networks gave Icasa many reasons why not being allowed to effectively confiscate data paid for but not used by subscribers was a bad idea, including:

• It would disrupt their business models;
• Making data valid for three years was “tantamount to fixing the terms of the provision of data services” and would stifle competition, to the detriment of consumers; and
• It would increase networks’ current liabilities in the form of unearned revenue‚ which would impact on their ability to obtain financing at a reasonable cost and the extra costs would be passed on to customers.