Operators face showdown at the consumer corral - TechCentral

Operators face showdown at the consumer corral

Mamodupi Mohlala

The National Consumer Commission, established in April to enforce the new Consumer Protection Act, has received objections from all of SA’s big operators, with the exception of Neotel, to the compliance notices it served on them demanding they make the terms of their contracts clearer to consumers.

Head of the commission, Mamodupi Mohlala, initially set a deadline of mid-September for operators to comply with its demands for transparency in advertising, non-automatic renewal of contracts and the ability for consumers to cancel contracts by giving 20 days’ notice, as stipulated by the act. To date, only Neotel has agreed to amend its contracts.

Vodacom recently expressed its opposition to the compliance notices, claiming it was already in talks with the commission regarding amendments to its contracts and advertising. The company’s chief officer for corporate affairs, Portia Maurice, said recently the company was “surprised” to receive a compliance notice because it “already had an amendment process underway and had agreed with [the commission to]an implementation date of 31 October”.

Mohlala says the commission received objection notices from Cell C and MTN on Wednesday, and that it expected objections from Telkom and its mobile arm, 8ta, to follow.

The commission has been arguing with Vodacom about issues of quality of service for some time. “In terms of section 54 of the act, which deals with issues of quality of service, a consumer is entitled to receive goods or services at levels to which that consumer is accustomed, or at the levels as stipulated in the consumer’s contract,” Mohlala tells TechCentral.

She says the issue is of growing relevance in light of Vodacom’s recent network failure and the furore earlier this week regarding its announcement that it would be throttling data speeds of heavy users of the BlackBerry Internet Service.

Vodacom has since backtracked on its stated plans, with group CEO Pieter Uys blaming miscommunication by its corporate communications department.

Vodacom Group CEO Pieter Uys

“In terms of these compliance notices, we as the commission are saying there must be some guarantees with regards to quality of service. Currently, as the operators’ contracts stand, there are no guarantees,” says Mohlala.

She says consumers are expected to “hold up their end of the agreements” by paying for services and paying additional fees in the case of premium services, but there “are no reciprocal guarantees from network operators around quality of service”.

The consumer act specifies that in the event that an operator does not meet the “particular quality-of-service levels that are outlined in a contact”, then the it “must offer the affected consumer a remedy”, she says. If not, “the consumer is entitled to a refund to the extent that they have not received the guaranteed services or quality of service. Consumers must be compensated when operators don’t meet their obligations.”

According to Mohlala, operators have “exclusive control over issues of network coverage and quality of service” and therefore need to give “some sort of commitment to consumers who are paying a lot for those services”.

She says the compliance notices served on the operators also deal with the provisions of section 14 of the act. This refers to the bundling of services. The act says the “bundling of services is not prohibited, but operators must clearly show the benefits of a bundled service to consumers. Over and above that, they must show the financial benefits to the consumer.”

Under the act, operators are obliged to make explicit and explain “in simple terms” what the unbundled costs of a service would be when compared to the bundled offering.

“The obvious argument operators are going to put forward is that they don’t have absolute control over the services or over the full value chain of bundled services,” she says. “But we are saying to some extent, in relation to the product and services that they do offer, they have exclusive control over airtime [and]they have a responsibility to demonstrate the benefits of the various elements of the bundled service.”

Mothibi Ramusi, Cell C’s executive head of regulatory affairs, says the company objected to notice it received because it believes there was “no merit in issuing a compliance notice as Cell C’s subscriber agreement is compliant with the act”.

Vodacom’s Maurice says the operator intends to “address the matter” of the compliance notice it received “directly with the commission”.

And Robert Madzonga, chief corporate services officer at MTN SA, says the compliance notice called for it to “adopt wording proposed by the commission” in its contracts and that it has “formally objected to the notice on various legitimate grounds”.

“MTN has asked the [national consumer]tribunal to set the notice aside,” Madzonga says. “Amongst other things, MTN contends the notice was issued at a time when the subscriber agreement was in fact compliant; that the notice is based on an outdated and incorrect version of the subscriber agreement; and that the wording proposed in the notice is inappropriate.”

He says that should the tribunal refuse to set aside the notice, “MTN has asked that the terms of the notice ought to be varied so as to allow a proper timeframe for compliance”.  — Craig Wilson, TechCentral

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