Consumers can soon put out-of-bundle billing behind them
New regulations that will put an end to automatic out-of-bundle (OOB) billing will come into force early next year, something that is seen as great news for South African consumers.
The End-user and Subscriber Service Charter Amendment Regulations will be implemented from 28 February 2019. This after a court case between the Independent Communications Authority of South Africa (ICASA) and Cell C and MTN SA was settled last week.
"This is the kind of protection the consumer has needed for a long time," says Arthur Goldstuck, World Wide Worx MD. "Operators should not wait to be forced to look after their own customers, because what is being required by ICASA is a no-brainer for the customer, and it doesn't even go far enough."
Among the new regulations is the provision to allow users to either opt-in or opt-out of OOB data charges to minimise bill shock. The current common practice is that customers are automatically switched to out-of-bundle pricing once their data or voice bundles have been depleted.
The regulations were published on 7 May and the regulator gave operators one month to comply. However, they were held up in June when Cell C headed to the courts, applying for an urgent interdict against the regulator, saying it was impossible to meet the proposed timeline. MTN then joined Cell C's application as a respondent.
Goldstuck says it is great news that customers can't be forced into out-of-bundle billing without their consent.
"It's a big change for the industry, but it's an entirely necessary and expected change. The concept of bill shock is entirely based on the operators not protecting their customers in this way.
"This is something that we have been calling for, for many years so it's again staggering that the operators should be fighting against it or wanting more time. It's been coming for years and it just highlights the fact that they have a knee-jerk reaction against any protection being added to how they handle their customers," Goldstuck says.
"It baffles me that the one company that went to court on this is the company that has positioned itself as the 'consumer champion' and as such they should have had these kinds of options in place for a long time. The only reason that one can imagine that the operators haven't introduced these kinds of options independently, is because of the impact on revenue. Operators make a lot of money from out-of-bundle billing."
The huge price gap between in- and out-of-bundle data pricing has been a concern for years. Earlier this year, figures from an ICASA bi-annual report showed the percentage variance between in-bundle rates and OOB rates can be as high as 2 720% (Cell C), 1 930% (Vodacom), 1 522% (MTN) and 561% (Telkom).
The new regulations also protect OOB billing on voice and SMS services for users who are on a postpaid or hybrid tariff plan. If those customers' voice and SMS services are depleted and they do not buy additional voice services or SMS services, "a licensee must provide such end-user with an option not to access the relevant depleted services and allow such end-user access to emergency services, customer care services, and incoming voice calls, incoming SMSes and any other free services".
Some of the other new rules include that operators need to send specific depletion notifications to customers when data, voice or SMS bundles reach 50%, 80% and 100% depletion. It also forces operators to provide end-users with an option to roll-over unused data before the expiry date, and the option to transfer data to other end-users on the same network.
The roll-over data rule, however, is not completely clear for users and will likely differ from operator to operator.
"The authority is of the view that the business rules (including terms and conditions of the roll over) relating to the roll-over of unused data should be determined by licensees. In addition, the authority is of the view that rolled over data should be depleted first before the depletion of new allocated data bundles to ensure end-users derive maximum benefit from the rolled over data," the regulation reads.
"Without being overly prescriptive in respect of the expiry period of rolled over data, the authority would like to encourage licensees not to expire rolled over data before the expiry date of a new allocated data bundle."
Goldstuck says theargument from operators as to why data needs to expire has often been that it allows for better network planning, which he says "is a very disingenuous argument".
"I can guarantee you that the usage patterns are a more powerful planning tool than what is actually being sold. If they are not using their usage trends, they are being both inefficient and irresponsible."
Goldstuck says these regulations show "ICASA is moving in the right direction. They tend to have to move more slowly than the consumer wants because as you can see, the operators have a knee-jerk reaction to any limitation on their powers.
"As far as the operators are concerned, we would really like to see the operators becoming true champions of the consumer and to pay more than just lip service to wanting to protect their own customers."
Telcos get ready
SA's mobile operators say they are working towards implementing the regulations by the February deadline.
MTN SA's executive for corporate affairs, Jacqui O'Sullivan, told ITWeb the telco welcomes the settlement with ICASA.
"The settlement has created valuable regulatory certainty that will give MTN the additional time required to achieve compliance. MTN supports ICASA's objectives, as envisaged by the regulations. The court proceedings did not seek to challenge the substance of the regulations, only to secure the additional time needed for MTN to deliver the extensive system changes, which are required for compliance. We look forward to completing this full process, by the end of February 2019."
A Cell C spokesperson told ITWeb that its "intention was always to comply with the regulations; we simply asked for more time to implement complex changes".
Cell C says the new implementation date "provides all the operators more time to implement the necessary changes in order to be compliant with the regulations".
"Vodacom notes the extended deadline for the End-User and Subscriber Charter Regulations. We have already started making the necessary preparations for implementation," a spokesperson confirmed with ITWeb via e-mail.
Telkom did not respond to a request for comment by the time of publication.