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No one asked us about 3-year data bundles – ADSL and fibre ISPs

The National Consumer Commission (NCC) recently stated it consulted with the telecommunications industry on the issue of a minimum expiry period of three years for data.

According to the NCC, this is in accordance with Section 63 of the Consumer Protection Act (CPA).

Mobile operators objected to regulators forcing a minimum validity period for data bundles, however, arguing that the NCC is misinterpreting the CPA.

While the NCC engaged at length with mobile operators on the matter, fixed-line Internet service providers say they were not consulted at all.

Only Telkom was consulted, but it operates a mobile network.

Building regulations

Internet Solutions, Afrihost, and ISPA all said the NCC did not approach them about the issue of data bundle validity.

Afrihost said that although it strives to be in full compliance with relevant legislation, it is difficult to comment on the matter without more information from ICASA or the NCC.

ISPA said the issue has been around since at least 2012, and given the NCC’s history of lack of action with respect to applying Section 63, it expects the body won’t be taking the matter forward with any urgency.

“ISPA does not anticipate that ICASA will try to enforce the section until there is clarity obtained in a court,” it said.

“ISPA’s understanding from the submissions of the incumbent operators are that enforcing the NCC’s interpretation of Section 63 will be legally challenged by at least one of them.”

3-year data bundles

Internet Solutions said it would have expected the NCC to engage with it through standard public participation and deliberation processes.

“The enforcement of data that remains valid for three years would fundamentally impact traditional operator business models on many levels, including network, investment, and priority planning,” said Internet Solutions chief solutions and operating officer Tony Walt.

Walt explained that a certain amount of “breakage” is priced into broadband products.

Breakage refers to when a subscriber does not use their data cap before the end of its expiry period.

Service providers take this customer behaviour into account when pricing their products, allowing them to bring down prices.

Forcing data bundles to remain valid for three years means that service providers’ operating models and commercial models become invalid.

“Operators will be impacted regarding network capacity planning – whether this be in allocating network capacity for high-demand times or alleviating congestion by optimising a particular base station through careful investment in technologies,” said Walt.

“Globally, we see the continuous rise of consumption-based models where a user or entity pays only for what they use. Perhaps the answer is not in allowing the storage of unused data for lengthy periods of time, but rather evolving to pure pay-per-use data consumption.”

Now read: 3-year data bundles will make us more money – Vodacom

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