Long-term lock-ins here to stay?

Consumers will have to deal with long-term mobile phone contracts and ambiguous billing until at least February next year.

The Independent Communications Authority of SA (ICASA) has bowed to a legal feint played by Vodacom this week and postponed the implementation date of its new handset-subsidy regulations.

ICASA's gazetted regulations would have allowed customers to decide exactly how long they chose to be locked into a contract with any given provider. They also stipulate: "Post- and pre-paid offerings or packages that include handset subsidies must clearly indicate the subsidy and the monetary value of the services offered."

Providers would have been expected to show clearly how much of the subsidy remains on any given contract, as well as the cost consumers will need to cover if they decide to opt out of an existing contract. Both stipulations must be shown on the bill at the end of every month.

In response to the looming implementation date, which would have been next week Monday, Vodacom approached the courts to obtain an urgent interdict against the regulations. The company subsequently withdrew the legal application, but did not say why.

ICASA has since released a statement, saying: "The reason for the postponement is due to Vodacom having instituted a legal review process of the handset subsidy regulation. ICASA will not blink in its mandate of promoting and protecting the interests of vulnerable consumers."

Earlier this year, ITWeb conducted an investigation into contract terms and conditions, and discovered many cellphone providers forced customers to ride out contracts, because of exorbitant cancellation penalties and full contract payouts. Some customers paid close to R10 000 to cancel a contract half way through the stipulated period.

Some providers insisted the cancellation costs were intended to pay off cellphones subsidised as part of the contracts.

The implementation of ICASA's new regulation would have placed the control of contracts in the hands of consumers, helping to prevent surprising high-priced penalties. It would also have allowed consumers to decide how long they would like a contract term to be, with periods from six, 12, 18, to 24 months.

However, ICASA says the legal action taken by Vodacom will not prevent the regulations from coming into effect, but has only postponed them. "Operators should, in the meantime, be gearing their systems for implementation by 1 February 2009," says the authority's statement.

Several industry players have suggested that ICASA cannot afford another legal battle, with the action it is facing from Altech Autopage Cellular.

Autopage launched an urgent application in April, with the Transvaal High Court, to interdict a conversion process being conducted by the authority to switch current value-added network service providers' licences to the new electronic communications network service licences.

The authority faced similar action from the Wireless Access Providers' Association in the same month.

While the court has heard the case between Autopage and ICASA, judgement in the matter has been reserved until further notice.

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