South African Regulator Issues Data Billing Rules

On 17th November, the South African communications regulator, Independent Communications Authority of South Africa (ICASA), issued a media release titled: “ICASA moves with emphasis on the reduction of cost of communication to reach acceptable levels for the benefit of consumers”. The background to this curious move is simple: mobile users in South Africa have previously launched campaigns such as #DataMustFall on Twitter in response to high costs of mobile charges especially with regard to data usage.

ICASA says that it has taken steps to stem this dissatisfaction.

In this regard, ICASA has developed a comprehensive plan that outlines its short, medium and long term interventions to ensure greater transparency of communication services and also to bring down the cost of communication in South Africa

The key interventions in terms of the draft Regulation published are the following:

  • All operators will be required to provide prepaid data bundles with minimum expiry period of 3 years.
  • Operators must also send usage notifications for data depletion to end-users. The intervals need to show when bundle usage reaches 50%, 75%, 90% and 100%.
  • The operators are required to provide an option to post-paid users to roll over unused monthly data allocation to the next billing period or to transfer the monthly data allocation or a portion of the same to another SIM card.
  • Subscribers must also be given an option to opt-in or opt-out of being charged out of bundle data rates to avoid bill shock.

Despite the obvious typos in the media release (e.g. where the year 2017 and 2018 have been interchanged resulting in the impression that the regulations will somehow kick in on 31 March 2017), it seems that the plan is to effect these requirements from April 2018.

ICASA means well for the industry and is watching out for the consumers. This matter is once more a reminder that during this era of uncertainty, a regulatory decision in response to consumer demands can throw mobile operators into uncharted waters any time.

Whereas it is unlikely that a significant proportion of subscribers actually have much of an unused data bundle balance after 3 years, there will be some changes. A simple example is revenue streams from large corporate and government sectors which do not track their usage very well. I have personally encountered cases where the US embassies in African countries would hold hundreds of lines which would accumulate a monthly data bundle for many years. Each month, the mobile operator would send bills for these lines… and promptly, each month the operator would automatically remove the unused data bundle assigned the previous month. Hardly illegal but not exactly the way to do business. This ICASA move will seal such “easy revenue opportunities”.

Consider also user experience when impacted by network reliability. Once a subscriber purchases a data bundle, there is a lot that is simply not within his control any more. It is not uncommon in some countries for a whole region to suffer network downtime for a significant portion of the day. You guessed it – operators normally don’t go back and extend the data bundles for a period equivalent to the downtime. If a subscriber purchased a data bundle for 6 hours and he cannot access the network for 5 hours, he is left with 1 hour to use the bundle or lose it.

The rest of the requirements are not complex to implement and many operators have already configured mechanisms to send out balance notifications, allow some tariffs to roll over unused balances and also notify users when at various stages of bundle depletion.

There is a Swahili saying: If you see your friend being shaved, wet your head in preparation. If and when ICASA gets this going, it is very likely other African communication regulators will follow suit. The rest of the African operators should start preparing.

Joseph Nderitu
Joseph Nderitu

Joseph Nderitu is a consultant who specializes in revenue assurance. He is currently contracted as Head of Revenue Assurance and Fraud Management at Vodacom’s operation in Tanzania, having previously served in the same role at Vodacom Mozambique.

 

Before his work with Vodacom, Joseph was an internal audit manager for Airtel, with responsibility that covered their 17 countries in Africa. Whilst at Airtel, Joseph led reviews of the Revenue Assurance, Customer Service and Sales & Marketing functions.

 

Prior to his stint at Airtel, Joseph was an RA manager at Safaricom in Kenya. He holds an MSc Degree in Information Systems.