Icasa tells NCC to deal with data expiry issue

Icasa has dodged the highly controversial “data expiry” issue‚ saying it’s the National Consumer Commission’s job to “take the necessary steps” to force the cellphone industry to allow subscribers to make use of pre-paid data for up to three years.

All Icasa has said about its about-turn on data expiry is that it did so “after careful consideration of submission by interested parties”.

“However‚ the Authority is of the view that the NCC‚ as the custodian of the Consumer Protection Act (CPA)‚ should take the necessary steps to enforce compliance (with regard to data expiry).”

In the seven years since the CPA came into effect‚ all the networks have been adamant that its Section 63 - which requires that all pre-paid goods and services be redeemable by consumers for at least three years - does not apply to them. Icasa’s “Reasons” document includes this: “MTN is of the view that Section 63 does not apply to prepaid data bundles as it requires that an end-user be given a period of three years within which to redeem a voucher and not a period of three years to use the services - data bundles - that were made available pursuant to the purchase of a voucher.”

But the NCC doesn’t agree. “We remain of the view that pre-paid data should not expire unless three years has passed‚ or the data has been used up‚” NCC spokeman Trevor Hattingh told TimesLive on Monday night.

“The network providers resell that unused data; data that has been paid for and legally belongs to the subscribers who have paid for it in advance.

“We cannot and will not promote undue enrichment.”

Consumers were entitled to the full value of the data they’d paid for‚ Hattingh said. “If a network is unable to hold onto unused data for consumers for three years‚ they should create a mechanism to refund consumers the monetary value of the unused data at the time of ‘expiry’.”

Vodacom told Icasa that 62% of its subscriber base uses data bundles with a validity period of less than 30 days.

Asked what action the NCC intended to take‚ Hattingh said it would be in a position to reveal that by the end of the week.

Meanwhile‚ the Icasa regulations do require the industry to introduce several measures which will protect consumers from high out-of-bundle data prices and data loss to some extent - all of which the industry was also mostly dead set against.

From May 30‚ when the regulations kick in‚ operators will have to send notifications to consumers once they have used 50%‚ 80% and 100% of their voice‚ SMS and data bundles.

And consumers cannot automatically be defaulted to out-of-bundle rates.

The networks will also have to provide subscribers with an option to roll over unused data to ensure they don’t lose it‚ but Icasa has stopped short of prescribing for how long.

But importantly‚ if unused data is rolled over‚ it must be used before any newly allocated data.

And subscribers must be given an option to provide unused data to other users on the same network.

This the first phase of Icasa’s data services interventions - a cost analysis that could lead to price regulation is on the cards.

The networks gave Icasa many reasons why them not being allowed to effectively confiscate data paid for but not used by subscribers within as little as four weeks after purchase‚ was a bad idea.

Such as:

• It would disrupt their business models;
• Making data valid for three years was “tantamount to fixing the terms of the provision of data services” and would stifle competition to the detriment of consumers; and
• It would increase the networks’ current liabilities in the form of unearned revenue‚ which would impact on their ability to obtain financing at a reasonable cost and the extra costs would be passed onto customers.