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Wasted bundles cost subscribers

Nicola Mawson
By Nicola Mawson, Contributor.
Johannesburg, 11 Jul 2011

Mobile operators' refusal to comply with the provisions of the Consumer Protection Act (CPA) costs contract subscribers a “huge” amount of money as unused voice and data bundles expire after a few months.

However, a consumer protection body created by the CPA is ready to force mobile operators to allow SA's 10 million subscribers to carry over minutes and data bundles for three years, getting rid of the current “use-it-or-lose it” policy.

The National Consumer Commission (NCC) says the Act's provision that vouchers can only expire once fully used, or after three years, applies to data bundles and the so-called free minutes that are sold with contract packages.

However, despite the three-year rule, call centre staff are telling subscribers that bundled free minutes can be carried over for a maximum of six months, while data can only be rolled over for two.

SA's largest mobile operators will not officially clarify when bundled minutes and data expire, or whether they will comply with the commission's standpoint.

Instead, the operators argue, clarity will be provided after the Independent Communication Authority of SA's (ICASA's) exemption application - to have some parts of the Act fall under its jurisdiction - is finalised.

The CPA, which came into effect on 1 April, states a “prepaid certificate, card, credit, voucher or similar device” does not expire unless it has been redeemed, or until three years after the date of issue.

No leeway

NCC commissioner Mamodupi Mohlala says unused data and free minutes bundled with contracts must carry over for three years and cannot expire any earlier. All data and minutes accumulated from April must roll over for a full 36 months, she says.

Subscribers pay on a month-to-month basis and are protected under the law, notes Mohlala. Cellphone companies cut subscribers off if they do not pay their bill each month, so there is no reason why consumers cannot be afforded protection under the law.

“We need a test case, but I believe every month as [subscribers] pay, their rights are being reactivated,” explains Mohlala.

Mobile operators that do not roll over free minutes will be compelled to do so, and the NCC will issue compliance notices to force them to comply with the law, adds Mohlala. She says failure to comply when ordered will result in the matter being referred to the tribunal, which has the power to fine companies R1 million, or up to 10% of turnover.

The so-called free minutes are not a gift from the mobile networks as they are being paid for as part of a package, says Mohlala. However, she cautions subscribers “can't come and demand a right the package doesn't afford you”.

Real life

Despite the NCC's position, call centre staff at four of SA's operators are telling consumers that data rolls over for a maximum of two months, and minutes can only be accumulated for six months.

MTN Direct told ITWeb that airtime can be carried over for six months, while data rolls over for a month. Vodacom's call centre says minutes roll over for six months, and data for two. “Six months is more than enough,” said Vodacom's call centre agent.

A Cell C store said free minutes roll over for two months, and data can only be carried over for a month. SA's newest cellular company, 8ta, told ITWeb unused minutes can be carried over for a month, while data expires in the month it is bought if not used.

Two of SA's cellular networks would not comment on the NCC's position, citing ICASA's exemption application as a reason for not clarifying the current expiry dates. The authority is consulting with the industry to decide if some parts of its mandate, which overlap with the CPA, should be exempted from the Act and continue to fall under its jurisdiction.

Cell C says: “ICASA is in the process of applying to the NCC for an exemption with regards to this aspect of the Act. Until the process is complete, Cell C cannot comment on the matter.”

MTN SA corporate services officer Robert Madzonga says the operator is in talks with the NCC on a “variety” of issues and supports ICASA's exemption application. “Once these processes have been concluded, further clarity on these matters will be provided,” which should eradicate confusion around interpreting the law, notes Madzonga.

However, ICASA only wants prepaid SIM cards to be exempted from the three-year provision, because the body is worried SA may run out of numbers, which it says are a finite resource.

Mohlala points out that the CPA remains in force until ICASA's exemption is approved. She says the authority's regulations cannot trump consumer rights under the Act. If ICASA is successful in its application, it will have to protect consumers to the same extent as the CPA.

Vodacom chief officer of corporate affairs Portia Maurice says the three-year expiry rule only applies to “vouchers” such as SIM cards, and not products purchased through the cards. She argues Vodacom complies with the law because prepaid airtime vouchers last for three years.

SA's newest operator, 8ta, distinguishes between airtime bought with a prepaid SIM, and bundled minutes and data. Contract customers can carry over up to six times' monthly minute bundles, while prepaid data is valid until the end of the next calendar month. It points out ICASA is applying for exemption from the provision in the CPA relating to prepaid vouchers.

Wasted money

Arthur Goldstuck, MD of World Wide Worx, says he cannot quantify how much money SA's almost 10 million contract subscribers lose each month, because data and minutes expire, but it is a “huge” amount. “The issue of data not carrying over more than a month is a major flaw in data cost structures.

“It's impossible to calculate the value that customers are losing on their various accounts. It has been an issue for many years across contract call and SMS bundles, as well as data bundles.”

There is no such thing as free minutes, because consumers are paying for them in the bundled price, notes Goldstuck.

It took the networks years before they allowed data to be carried over for just a month, argues Goldstuck. “They've turned deaf ears to the criticism that they are in effect creaming a huge proportion off the top of customer payments for bundled services.”

While subscribers can try and sign up for services that best fit their usage patterns, there is no flexibility for those who have erratic usage patterns, he says. “The CPA, rightly, addresses this question, and consumers will cheer on any efforts by the NCC to restore their rights in this regard.”

Goldstuck points out MTN recently announced subscribers can carry over up to two months' unused date. He says this is “good news for the consumer, and probably also a move to pre-empt requirements for improved carry-overs from the NCC. We can probably expect even more generous carry-overs in the future, and announcements from other networks to the same effect.”

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