The disconnection of almost a million prepaid subscribers, because they were not generating revenue for MTN, flies in the face of government's drive to connect South Africans, affordably, to the end of social and economic upliftment.
This is according to industry observers and comes after MTN last week announced it disconnected 973 064 subscribers who "had been showing activity, but not generating revenue as per our 90-day RGS [revenue-generating subscriber] requirement".
Analysts say this translates to subscribers, who may have been receiving calls and SMSes, but were perhaps unable to afford airtime, being effectively cut off. Ovum analyst Richard Hurst was taken aback by the disconnection of a large chunk of prepaid subscribers. "It flies in the face of communication and connecting people."
Hurst says, given the new mobile termination rate (MTR) structure introduced by the Independent Communications Authority of SA (ICASA) this year, operators may ramp up these kinds of initiatives, because any MTR fees they may receive are swallowed by the costs of keeping a subscriber on board.
"I expect some kind of backlash. Surely customers [who have been cut off] will take the issue up with ICASA, because it goes against its notion of giving South Africans more access to affordable communications."
IDC analyst Spiwe Chireka expects ICASA to step in. "MTN is holding people [to] ransom, saying now we are requiring you to recharge [your prepaid account]. Not everybody can afford to recharge, but they still need access to communications."
Government's National Development Plan 2030 places a large amount of emphasis on telecommunications and its potential in helping SA achieve tangible economic growth and better living standards.
Consumer protection
Nicholas Hall, an associate at Michalsons Attorneys, says MTN's action is grounds for a claim that it acted unlawfully under the Consumer Protection Act (CPA). He explains this is because the terms and conditions document cannot be found on its Web site.
Although these conditions exist, they do not appear in obvious places on MTN's site, nor were they available in an MTN Mahala starter pack purchased by ITWeb. As such, the company has not done enough to make them available and could face a claim of unlawfulness from a subscriber it disconnected.
The almost one million subscribers could also band together and take MTN on through a class action suit, says Hall. "That's a class action waiting to happen."
No impact
However, MTN has defended the action, saying it has made sure the RGS rules are aligned with MTN Group's stipulation in terms of counting customers as active on the base - and removed customers from the active base, based on this stipulation.
"There has been no additional impact on the MTN customers, as this was purely a clean-up to ensure that no other events are taken into account for RGS. The customers that have been removed have not shown recharge events for 90 days and have been informed as per our usual SMS notifications. Within the 90-day period, we notify customers on 30 days that they need to make a chargeable call, SMS or recharge to stay active. We also send the customers a warning SMS on 85 days to make a chargeable event."
MTN says customers can extend the 90 days by using Access4Life extender, provided the customer has a minimum amount of R25 airtime loaded every 90 days.
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