Finweek English Edition - - Communication & Technology - BENE­DICT KELLY benk@fin­

AL­THOUGH THE NEW REG­U­LA­TIONS gov­ern­ing the sub­si­dies ap­plied to cel­lu­lar hand­sets were due to come into force on 17 Au­gust, it ap­pears South Africa’s ser­vice providers were ill pre­pared to im­ple­ment them. Of the ques­tions ad­dressed to Nashua Mo­bile, Vo­da­com, MTN and Cell C, only Nashua Mo­bile and Vo­da­com re­sponded, with both rais­ing con­cerns that the ter­mi­nol­ogy used in the reg­u­la­tions is “un­clear and con­fus­ing”.

Dot Field, chief com­mu­ni­ca­tions of­fi­cer at Vo­da­com, says it had con­tacted tele­coms reg­u­la­tor Icasa to raise its con­cerns with re­gard to the com­mer­cial and tech­ni­cal im­pli­ca­tions of the reg­u­la­tions for the in­dus­try. Field says those en­gage­ments had taken place both at in­di­vid­ual com­pany and at in­dus­try lev­els.

Vo­da­com’s con­cerns were echoed by Mark Tay­lor, MD of Nashua Mo­bile, who says most of SA’s cell­phone net­work op­er­a­tors and ser­vice providers – in­clud­ing Nashua Mo­bile – are mak­ing rep­re­sen­ta­tions to Icasa in a bid to ob­tain more clar­ity on a wide range of is­sues.

The reg­u­la­tions stip­u­late how long con­tracts may run, how early can­cel­la­tions may be dealt with and how ser­vice providers in­form their cus­tomers about what sub­si­dies are be­ing given to them and how those sub­si­dies are ac­counted for.

How­ever, Tay­lor says some is­sues in the reg­u­la­tions – such as con­tract terms and con­nec­tion fees – were never dis­cussed in a pub­lic fo­rum and due to that the in­dus­try wasn’t given the chance to ar­tic­u­late its views on those is­sues with Icasa. “We be­lieve that in a com­pet­i­tive mar­ket – where there’s a choice of sup­pli­ers – many of the new reg­u­la­tions are un­nec­es­sary.

How­ever, he says Nashua Mo­bile is cur­rently pre­par­ing an on­line and pa­per billing sheet that will give its sub­scribers a one-glance over­view of all the in­for­ma­tion re­quired by Icasa. The in­for­ma­tion will in­clude the sub­sidy left on the con­tract, the cost to ter­mi­nate the con­tract, free min­utes and the value-added ser­vices the con­sumer is pay­ing for, among other in­for­ma­tion.

The cost of ter­mi­nat­ing a con­tract is a sore point for many sub­scribers, as ser­vice providers have tra­di­tion­ally levied mas­sive penal­ties for end­ing a con­tract early. To il­lus­trate that, a call to a ser­vice provider re­sulted in a ter­mi­na­tion fee more than dou­ble the cost of sim­ply al­low­ing the con­tract to run its course and tak­ing out a new one.

Un­der the new reg­u­la­tions that kind of ram­pant prof­i­teer­ing would be pro­hib­ited, as ter­mi­na­tion fees have to be linked to the amount left on the sub­sidy given to the cus­tomer when he took out a new con­tract.

Tay­lor says there’s a great deal of un­cer­tainty among net­work op­er­a­tors and ser­vice providers about how they ac­count for the hand­set sub­sidy. “Ex­am­ples in­clude whether to ac­count for the hand­set at its cost price or its price af­ter a dis­count or mark-up. Be­cause there’s no stan­dard def­i­ni­tion, it will be dif­fi­cult for sub­scribers to make mean­ing­ful com­par­isons.”

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