The Independent Communications Authority of SA (ICASA) has moved to clarify its position regarding its enquiry into handset subsidies, following the publication of a discussion document on this topic in the Government Gazette at the end of last month.
According to the regulator, the purpose for this discussion document is to provide ICASA and the public with a comprehensive view regarding consumer needs and the competitive environment in the mobile industry.
ICASA says that since 1994, operators have been offering handset subsidies to contract customers under the pretext of a "free" phone, but that there are no options for a contract period of fewer than 24 months for postpaid subscribers.
The authority is seeking public comment on, among other things, "whether it is necessary to have such long contract terms".
An ICASA spokesman says SA is unique in terms of tying subscribers into such long contract periods and operators are using the provision of a subsidised handset as justification for this.
"In other parts of the world mobile services are offered without a contract, or with shorter contract periods where the maximum period is about 18 months," she says.
"Furthermore, in SA, consumers are required to pay expensive penalties whenever a postpaid service is terminated before the expiry date of the contract."
Another point of concern for ICASA is the lack of transparency regarding monthly bundled minutes, as it claims it is unclear how operators and service providers determine the packages and whether the monthly subscription fee is covering the handset or the bundled minutes.
The regulator also raises the issue that consumers are compelled to subscribe to certain services which are specified in the product offerings as part of the contract, although the consumer did not request or may not even wish to have access to such services.
These services range from compulsory itemised billing and caller line identity, to insurance for the handset, none of which are services related to the contract, but the operators and/or service providers make them compulsory.
According to ICASA`s spokesman, these are among the reasons for it conducting an enquiry to assess the effect of handset subsidies in the South African market.
The deadline for written submissions on this issue is 5 July, after which ICASA will inform the public through a government notice of its intention to have public hearings, which are also expected to take place during the course of July.
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