SA's low-budget retailer Pep Stores is working with Google to come up with a version of the tech giant's Android operating system that will help protect smartphone users - many of whom may be "first-timers" - from being blindsided by data costs.
This is according to World Wide Worx MD Arthur Goldstuck, who has been engaging with Pep for some months now. From engagements, he says, it has emerged that SA's largest cellphone retailer, Pep Stores, is collaborating with Google to cater to local smartphone needs.
Citing Pep Stores cellular executive John Edwards, Goldstuck says Pep and Google are working on Android propositions that are more "Africa-friendly", including a user interface that will let the user control data usage.
Edwards was not immediately available to comment this morning.
Goldstuck notes that, in the year to June, Pep sold 6.7 million handsets in a total market of about 15 million - almost all of which were in the prepaid market. "[This gives Pep] a unique insight into movements in that market."
Taken to task
Goldstuck says SA's mobile operators will have a rising storm on their hands if they do not pre-empt the consequences of a rapidly shifting feature-to-smartphone prepaid base, where scores of price-conscious consumers are set to be faced with a different type of bill shock - airtime guzzling.
This comes in the wake of a long-standing trail of consumer complaints around elevated cellphone bills, largely due to the "data explosion" - traditionally on the contract front, but this year increasingly on the prepaid front too.
National Consumer Commission (NCC) head Ebrahim Mohamed this morning confirmed the consumer watchdog would "soon" be engaging with SA's cellphone companies in a bid to reach a solution around behaviour that disadvantages consumers - in particular their alleged failure to warn customers around data usage limits.
He says, although SA's cellphone companies' customer contracts are now compliant with the Consumer Protection Act (CPA) - which came into being in April 2011, singling out mobile operators as one of the non-compliant elements - their behaviour "certainly affects consumers negatively".
Mohamed could not give a time-frame for the said engagements, but said the NCC would be looking to establish whether - as consumer complaints suggest - operators' commercial dealings amount to "unconscionable behaviour" and should be further tackled.
Prepaid protection
Analysts say, despite measures introduced by the CPA and a growing consumer consciousness, South African consumers are far from adequately protected when it comes to arming consumers against high bills.
"Local consumers aren't being ripped off, but they are also not being looked after - and the experience is equivalent to that of being ripped off," says Goldstuck.
Ovum analyst Richard Hurst says, while operators have built in some credit limits on certain post-paid accounts, "this is clearly not sufficient to prevent bill shock". He says out-of-bundle data costs are exorbitant and operators have made no moves to curtail this or adjust their pricing accordingly.
Richard Boorman, spokesperson for SA's largest mobile operator Vodacom, says it is important to differentiate between prepaid and contract subscribers when it comes to the issue of spend limits. "85% of our customer base is prepaid, and this group is automatically protected in that their maximum spend is limited by the amount of airtime loaded."
However, Goldstuck says the shift from feature phones to smartphones in SA is "happening faster than anyone could have imagined just a few months ago". This year, he says, will be the year that a marked increase in prepaid data use starts coming to the fore - a shift driven heavily by the availability of low-cost phones running on the Android operating system.
He says the drawback to this is that the phones are being sold to a market that is highly price-sensitive and resistant to buying data bundles - but the phones' capabilities force the use of ad hoc data use, which can cost up to R2 per MB. He says, if SA is seeing contract customers - who are accustomed to data usage - being blindsided by bills and not being able to manage spend, "imagine how severe the consequences will be in the prepaid market".
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