Vodacom's roll-over fees fly in the face of ICASA

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Vodacom may have back-tracked on its initial plan to charge consumers up to R49 for its data bundle rollover service.
Vodacom may have back-tracked on its initial plan to charge consumers up to R49 for its data bundle rollover service.

While Vodacom has a right to charge consumers fees for its data bundle roll-over service, this is "totally against" what the Independent Communications Authority of South Africa (ICASA) aims to achieve through the new data-expiry regulations.

This is according to analysts, reacting to Vodacom's proposed data bundle carry-over charges which the telco plans to introduce on 1 March.

It could cost consumers up to R49 for Vodacom's data bundle roll-over service.

Vodacom has proposed to charge its customers R5 to roll-over 100 megabytes (MB) in data, R12 to roll-over data between 100MB and 250MB, R19 to roll-over data between 250MB and 500MB and R29 for data between 500MB and 1GB.

This comes as SA's new data-expiry regulations are set to come into effect on Thursday at midnight, aimed at putting an end to automatic out-of-bundle (OOB) billing and allow users to rollover unused data.

While Cell C has also announced it will have limited data charges, Telkom and MTN currently don't charge for their data rollover service.

Sabelo Dlamini, senior research and consulting manager at International Data Corporation (IDC), says while Vodacom's proposed charges are not against the law, they defeat the purpose of the new ICASA rules, aimed to help keep more money in the consumers' pockets.

"Vodacom may have found a loop-hole in the rules within the 'out-of-bundle billing', but this is totally against what ICASA wanted to achieve with setting these rules in the first place - to get rid of expiry dates and out-of-bundle billing. So, this may be seen as another out-of-bundle billing," explains Dlamini.

ICASA's End-user and Subscriber Service Charter Amendment Regulations have been on the cards for a few years.

Among the new regulations is the provision to allow users to opt-in or opt-out of OOB data charges to minimise bill shock. This as the automatic switch to out-of-bundle billing, and the huge price gap between in- and out-of-bundle prices, has been a concern for years.

Other key changes to the rules include that operators need to send depletion notifications to customers when data, voice or SMS bundles reach 50%, 80% and 100% depletion, which all of the operators are already doing, or will implement by the deadline. It also forces operators to allow users to rollover unused data before the expiry date and transfer data to users on the same network.

Brian Neilson, director at market research firm BMI-TechKnowledge, explains that Vodacom's proposed roll-over billing is the telco's way to optimise pricing while maximising profit.

"While it is correct to say that this flies in the face of the spirit of the ICASA regulations, which is to reduce data costs for consumers, there is still the indirect positive impact of pricing transparency. This makes it easier for consumers to plan and manage their expenditure, since much of the confusion around 'breakage' is removed."

Senior consultant at Frost & Sullivan, Siyathemba Magobiane, says ICASA's new regulations do not provide guidelines on carry over charges; therefore Vodacom is at liberty to implement these tariffs.

"The charges announced by Vodacom are purely at their discretion. The new regulations do not advise on carry over charges."

Vodacom responds

After a public outcry over Vodacom's proposed data bundle carry-over charges, the mobile operator is reviewing its initial plans.

In a statement sent to ITWeb this morning, Vodacom says: "From 1st March, Vodacom will introduce a mechanism that will allow customers to roll-over their unused data, at prices that are significantly lower.

Currently customers typically forfeit any data that remains unused before it expires, however Vodacom says its customers have "long been able to roll-over their data, if they purchased the same bundle as the original one".

When asked if it would go ahead with the proposed tariffs, Vodacom said it will only be able to communicate the new tariff charges on 1 March.

"We will communicate these tariffs to coincide with the planned launch on 1 March 2019. All Vodacom customers will have the ability to roll-over data without having to buy the same bundle as the original one, at a tariff that depends on the amount of unused data remaining."

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