Mobiles: If they are smart, be smarter
For some time now, Sri Lanka’s mobile phone users have been charged for value added services that a majority of them did not knowingly subscribe for or want. It is not clear how long the scam has been going on. The service providers are vague, the regulator only just found out, and there is no evidence that anyone at ministerial level knows or cares. According to the Telecommunications Regulatory Commission of Sri Lanka, the country still has no laws to tackle the issue.
On the one hand, the Government is picking pockets through the illegal Value Added Tax (charged even before the levy was approved in Parliament). Now we find telecommunication companies doing it and getting clean away, laughing all the way to the bank.
This sort of third-party billing is commonly described as “cramming”. In Sri Lanka, it occurs when mobile phone companies enter into partnerships with third parties who inveigle consumers into enlisting for services they were not even aware of, typically through the internet.
The 2015 Central Bank Annual report places mobile phone penetration at a whopping 116 percent. There are more mobile phones in Sri Lanka than there are people! Admittedly, a large number of these are traditional instruments and not smart phones that enable internet access. This would indicate that the number of mobile phone users affected by unauthorised charges for value-added services is lower than it might have been.
But the use of smart phones is growing, encouraged by service providers offering discounted phones but standing to gain from increased use of mobile applications and data. One mobile phone company is even providing smart phones on easy payment terms with a view to widening internet penetration. All this is well and good, but the regulatory and consumer protection component of exploding mobile phone usage has just not kept up. The Consumer Protection Authority is neither protecting nor has the authority, it seems.
Mobile service providers make hefty profits; a cursory glance at their annual accounts provides ample proof of that. One company has routinely made around Rs. 5-6 billion in net profit each year for the past several years. A significant area of growth is value-added services. This means that, unless the regulator steps in, more and more customers will find themselves mired in the scam. But the regulator itself is clueless. And the politicians even more.