Yellow blues: MTN and other mobile operators in SA are not keen on customers being able to keep data bundles for up to three years, which is a proposal made by Icasa. Picture: REUTERS
Yellow blues: MTN and other mobile operators in SA are not keen on customers being able to keep data bundles for up to three years, which is a proposal made by Icasa. Picture: REUTERS

Mobile operators told the Independent Communications Authority of SA (Icasa) last week that the regulator would be overstepping its bounds if it went ahead with a proposal that would force them to keep data bundles valid for three years.

Icasa and other regulators, including the Competition Commission, are to investigate issues involving the perceived high cost of communication services in SA.

This was partly in response to campaigns such as the #DataMustFall movement which intensified scrutiny of data costs and the expiry of data bundles.

But mobile operators said at public hearings on the second draft of the End-User and Subscriber Service Charter Regulations, held last week, that extending the validity of data bundles to three years would limit consumer choice and could even push up prices.

Longer-dated data bundles were inherently more expensive for operators and consumers than short-term bundles, while standardised expiry periods would rob service providers of a key differentiation tool, they argued.

Further, they claimed that they had already cut data costs materially in recent months.

Network operators said data bundles should not be subject to section 63 of the Consumer Protection Act, which prohibits the expiry of prepaid credit or vouchers before a consumer has redeemed it, or within three years. Section 63 has been a contentious issue for the industry since 2011, when the National Consumer Commission accused mobile operators of noncompliance.

Going by the public hearings on Thursday and Friday, little progress has been made to clarify the matter, even though Icasa councillor Botlenyana Mokhele said the regulator planned to publish final regulations by the end of April.

According to some network operators, section 63 should no longer apply when airtime is converted into a data bundle.

Meanwhile, Mokhele said Icasa aimed only to develop industry standards and the regulator had no intention of meddling with prices.

But Themba Phiri, executive head of regulatory affairs at Cell C, said Icasa was "very much treading into commercial price regulation, which your statute does not permit".

Mapula Bodibe, consumer business unit executive at MTN SA, said that since long-dated data bundles were more expensive, the rules would be akin to pricing regulations. Diminished competition would also limit further reductions in data costs.

Bodibe said market studies showed that some customers preferred daily bundles.

Nicolette van den Heever, senior legal manager at Cell C, said a three-year expiry window was "not commercially viable", particularly for smaller operators.

Phiri said that Cell C had to pay "hefty penalties" to its roaming partners if it exceeded data usage forecasts, and forecasting was difficult when it came to long-dated data bundles as data could be used at any time.

Cell C also argued that locking in inactive numbers for three years meant these numbers could not be recycled.

As a result, Cell C said, there would soon be a shortage of numbers available for operators and users.

Meanwhile, the National Consumer Commission’s Babs Kuljeeth said the commission wanted unused data to be refunded to consumers on expiry.

Paul Hjul, director at Crystal Web, proposed that mobile operators offer consumers 1GB "insurance" bundles that would last three years and prevent customers from getting out-of-bundle usage shocks.

Moses Mashisane, GM of regulatory affairs at MTN SA, urged Icasa to rather focus on allocating more spectrum to the industry so that operators could roll out services faster and more cheaply.