• Mon. Nov 28th, 2022

Data bundle expiry: Competition Commission supports proposals, but wants clarity on promotions

Bykav

Oct 19, 2022

While the Competition Commission is supporting proposed regulatory changes that will ensure unused voice and data bundles are not allowed to expire within six months, it wants clarity on exemptions for promotions in order to ensure consumers can make informed choices.

The regulator says while the amendments aim to limit data expiry, the changes may have “unforeseen consequences”, such as higher prices and fewer choices in the market, and it is proposing a breakdown of the cost of data.

“If a customer wants to buy a 50MB, for example, they need to see what it costs for one hour, one day, one week, 30 days, six months,” the commission says.

The competition body submitted its response to the proposed legislative amendments to the Independent Communications Authority of South Africa (Icasa), saying the proposals were in line with the findings of its Data Services Market Inquiry published in 2019.

 

 

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That report detailed the high cost of data in the country, a market seen to be dominated by Vodacom and MTN, and instructed mobile operators to reach an agreement with the commission on data price reduction plans, or face prosecution by the Competition Tribunal.

Icasa proposes that mobile operators should not allow prepaid and postpaid airtime data and voice services to expire before six months, except those that are part of promotional packages.

The Competition Commission, however, has said there is a lack of clarity in the regulator’s proposal on what constitutes a promotional package. “The commission’s understanding is that new data expiry regulations exclude promotional packages, but it is not clear if promotional packages include short validity.”

Some mobile operators offer discounted data packages that expire on the same day of purchase or come with a weekly or weekend validity.

Meanwhile, Icasa wants companies to first apply data usage against unused data, until that data is depleted, and thereafter utilise the newly allocated data. Prepaid mobile users are said to be worst affected by the current expiry rules as short validity bundles tend to be more affordable for lower-income consumers, the commission said.

“Icasa will need to consider the impact on consumer choice and prices since the prices of short-validity bundles tend to be lower than 30-day bundles,” it said.

In its submission, MTN cautioned that the proposed regulations must strike a balance between the interests of the consumers and licensees.

The amendments were informed by concerns from consumer groups on the expiry rules, high out-of-bundle rates and rules, and out-of-bundle voice and SMS rules currently applied by licensees, in a country where the cost of communication is still said to be high.

A report by Surfshark, a VPN service company, flagged South Africa for having good quality internet at unaffordable rates.

It said as of 2022, the internet in Africa was 83% less affordable than in Oceania, the region with the most affordable internet, and the gap between these two regions keeps expanding.

kav

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