Cellphone data new regulations: Wendy has the good and the bad

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The Communications regulator has backed down on its previous draft regulations which stated that data bundles should not expire for three years.

The Consumer Protection Act states that all pre-paid goods and services must be redeemable for at least three years, and for the past seven years that it’s been in effect, the cellphone networks have refused to bow to consumer pressure to stop making airtime and data expire after a month or two or three.

They effectively say, after, say 30 days: “Right, we’re taking what you haven’t used back, sorry for you.” And then they resell it.

In November, Icasa proposed a uniform three-year data expiry period for all bundles, no matter the size, but the network operators argued that data expiry was necessary to help them plan their networks and keep prices down.

Vodacom told Icasa that 62% of its subscriber base uses data bundles with a validity period of less than 30 days. That’s just one network.

And here’s how MTN justified it to Icasa: Section 63 doesn’t apply to prepaid data bundles as it requires that a consumer be given three years within which to redeem a voucher, “and not a period of three years to actually use the data bundles that were made available pursuant to the purchase of a voucher.”

Clearly, if you can’t use what you’ve redeemed; if you can’t derive the full benefit of what you’ve spent your money on, in advance, then there’s no point to Section 63.

Happily, the National Consumer Commission agrees.

NCC spokesman Trevor Hattingh told me that the Commission is of the view that pre-paid data should not expire unless three years have passed, or the data has been used up, And then he said: “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 are entitled to the full value of the data they have paid for. 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.”

And this is relevant because Icasa has handed this data expiry issue over to the NCC.

So now we wait to hear what action they are going to take. I was told that this would be made public by the end of the week.

And now for the good news.

Icasa’s new regulations, effective from 30 May, require the cellphone network operators to:

• Send usage depletion notifications to consumers once they have used 50%, 80% and 100% of their bundles. 
• Ensure that subscribers aren’t automatically be defaulted to high out-of-bundle rates, which has resulted in widespread bill shock up to now. 
• Provide consumers with the option of rolling over unused data, before it “expires”, to ensure that they don’t lose unused data. But Icasa hasn’t prescribed how long that data must be rolled over for. 
• Change their data usage protocols so that any rolled over data is used before newly allocated data. That’s a huge plus - up to now, much of that rolled over data has expired because newly allocated data is used first. 
• Create an option for subscribers to provide their unused data to other users on the same network. 

Lots to like in there! 

We’ll be keeping close tabs on what the NCC does about the big three-year validity issue.

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