MTN has argued that competitive market forces are already doing what Icasa aims to achieve through regulation.
MTN South Africa has argued that proposed amendments by communications regulator Icasa to the end user regulations that would either extend or remove expiry periods for data bundles are a form of regulatory overreach that could harm consumer benefit instead of promoting it.
Presenting to a panel of Icasa councillors at public hearings for the so-called end-user and subscriber service charter amendment regulations, Bianca Gil, manager for markets and competition at MTN South Africa, said changing data bundle expiry rules will alter competitive dynamics between mobile operators, harm consumer welfare by reducing choice and require the implementation of complex technical changes to enact.
“Icasa is empowered to prescribe minimum standards for electronic communications services,” Gil said in the presentation. “This power does not extend to setting contractual terms and prescribing how services are provided. The proposed provisions interfere with the commercial relationship between operators and customers.”
Icasa in 2022 published draft amendments to its end-user and subscriber service charter regulations in which it proposed that telecommunications operators be forced to roll over data bundles for a minimum of six months. The draft regulations also dealt with the rollover of voice and SMS bundles.
In the latest revision of the draft regulations, Icasa aims to:
- Treat all service bundles that customers may purchase in the same way, be they voice, SMS or data;
- Ensure that social media and similar bundles are also treated similarly;
- Provide staggered provisions for the automatic, partial rollover of unused portions of service bundles of seven days or longer;
- Give certainly as to the full duration of very short bundles (for example, one hour equals 60 full minutes and one day equals 24 full hours); and
- Protect the right of consumers to transfer bundles or bundle portions between Sim cards on the same network.
But in its presentation, MTN criticised Icasa for its alleged failure to conduct an updated market inquiry to inform its proposed changes, especially considering that data prices have come down significantly in recent years.
MTN said the process to amend the regulations was started eight years ago. However, the market has changed considerably since then due to operators implementing “several measures” to address the cost of communication.
Competitive forces
Gil said competitive forces have driven innovation, forcing data prices down by about 62% between 2005 and 2011, 30% between 2012 and 2019, and a further 45% between 2020 and 2023.
And MTN argued that network quality standards and access have improved due to operators investing more capital to improve both the quality and reach of their networks. This, Gil said, occurred in spite of operators facing a multitude of headwinds including load shedding and high interest rates that caused a surge in the cost to provide network services.
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Gil said the proposed amendments will not only distort competition, but their implementation will place an onerous requirement on network operators as significant technical changes are required to implement them.
“The altered features of the data product (regarding validity and sharing functionality) and the commensurate effect on network planning are considered when formulated appropriate pricing,” said Gil.
She said there is no need for the proposed amendments because there already exist a multitude of mechanisms to help subscribers manage their access to data, including:
- A varied product portfolio that allows customers to opt for bundles which suit their usage/needs most appropriately;
- The availability of micro-bundles, which limit the risks of unused data bundles expiring;
- Auto-renew bundles that enable automatic rollover that help customers avoid out-of-bundle charges;
- Depletion notices to help customers monitor their usage;
- Data sharing, which MTN noted it introduced prior to its inclusion in the regulations; and
- Depletion and consumption rules that ensure that bundles that expire first are used first.
The draft amendments make similar provisions for changing the rules on the expiry of SMS and voice bundles, too. But MTN argued that trends towards consumer preference for data, with decreasing usage of voice and SMS will mean these amendments will likely make no difference if implemented.
MTN called for Icasa to consider the effects that changes to the regulations will have on attracting investment into South Africa’s telecoms sector, arguing that regulatory uncertainty could lead to a decrease in investor confidence.
Light touch
“Consideration must be given to the level of ‘harm’ sought to be remedied and the adverse impact of the proposed regulations on operators, competitive market forces and consumers. There is no current regulatory impact assessment to substantiate the need for these amendments. A light touch would be more appropriate, if required at all,” said Gil.
Icasa’s public hearings continue until Wednesday. – © 2024 NewsCentral Media