Heated debate over legality of data expiration

Johannesburg – How and when mobile networks expire consumers’ unused data is coming under the spotlight again in South Africa.

This is according to the spokesperson of the National Consumer Commission (NCC) Trevor Hattingh.

The NCC announced earlier this month that it is investigating contract price hikes by mobile networks in South Africa.

The year-long probe is set to study contract terms and conditions, which could include the issue of data expiration, said Hattingh.

READ: Commission to probe contract price hikes

“Currently, network providers provide you with a month in which to consume your data, after which you do not have access to the value of that data anymore, if you had any left by the end of the month,” Hattingh told Fin24.

“That is also something that we are looking into because there’s definitely an inconsistency there from the network operator’s side.

“The network operators provide you with a month, whereas section 63 of the Consumer Protection Act says you must be afforded three years to consume the data,” said Hattingh.

While the NCC investigation is studying terms and conditions of mobile contracts, or postpaid deals, the section of the Consumer Protection Act that Hattingh referred to deals with terms such as ‘prepaid’.

Section 63 (2) of the Consumer Protection Act that Hattingh referred to states:

“A prepaid certificate, card, credit, voucher or similar device contemplated in subsection (1) does not expire until the earlier of — a) the date on which its full value has been redeemed in exchange for goods or services or future access to services; or (b) three years after the date on which it was issued, or at the end of a longer or extended period agreed by the supplier at any time.”

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2012 investigation

Hattingh told Fin24 that in 2012, the NCC also conducted an investigation into mobile networks’ terms and conditions in contracts – a probe which further studied data expiration.

Hattingh noted that mobile operators, in 2012, complied ‘99%’ with the commission’s requirements.

“If you look at the one outstanding percent – an issue that was not finalised – …was the issue of section 63 of the compliance of data.

“What the network operators had indicated to us was that we need to understand that if we say, if they are to comply with section 63 of the law, then the price of data would escalate.”

Hattingh explained that mobile networks can determine prices monthly to ensure competitive costs.

He also said that the commission, at the time, considered the best interest of the consumer and therefore a decision was made to allow networks to continue expiring data after periods such as a month.

Data ‘devil’

But Hattingh said the issue of data expiration is emerging as a hot topic yet again.

“The devil has now stuck out its head again. When we fine comb through the standard terms and conditions, we once again come across this devil,” Hattingh told Fin24.

“And this time we are saying, you know, we are wiser now from when we were established in 2011,” Hattingh said.

READ: MTN sticks to its guns on data depletion

Hattingh said he was not in a position to predetermine outcomes of the NCC investigation.

However, he floated the idea of exchanging unused data for other products such as voice minutes and he said the technology exists for mobile networks to do this.

“Why is it that we cannot arrive at a point whereby we say let’s develop a currency that can be used?

“In other words, that can be used to convert into data or talk or airtime or whatever it is that you want to use the currency for,” he said.

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Networks respond

Fin24 asked mobile networks to respond to Hattingh’s comments on data expiration.

South Africa’s biggest mobile network Vodacom, which has approximately 30 million subscribers, said:

“Data tends to be discussed as a thing when it’s actually a service. When one buys 1GB (as an example) what one is actually buying is access to the data service for a specific period of time and up to that specified amount of data.

“The reason for this is that we purchase capacity on data ‘pipes’ from other providers and this approach helps us to understand how much capacity we need. If we over-provide capacity and it’s not used, then that data is in effect lost and can’t be resold at a later date. This impacts our costs and our ability to continue to bring data costs down.

“If we under-provide then the end result would be network congestion.

“Vodacom complies with the requirement from Section 63 of the CPA which stipulates that vouchers must remain valid for three years. Once the voucher has been used to purchase a product such as data or ringtones, then our view is that the section 63 requirement falls away. The accumulated and unused data may be carried over for a period of up to 60 (sixty) days where after it shall be forfeited.”

Graham de Vries, chief corporate service officer for MTN South Africa, said:

“The three years expiry period in respect of a pre-paid data voucher only applies when a customer does not redeem that voucher or PIN number on the MTN network. The method of redeeming a physical data voucher is when the customer enters the PIN number found on the voucher and the airtime or data is immediately available for usage. As a result of such redemption, the standard expiry rules will apply to the pre-paid data bundles.”

Graham Mackinnon, Cell C’s chief legal officer, said:

“Cell C’s vouchers are valid for either three years or until the date that they are redeemed, in accordance with the stipulations of the Act. The expiry of data has nothing to do with the validity period of the voucher. The Consumer Protection Act clearly deals with the expiry of vouchers and we urge all interested persons to carefully study the Act before coming to incorrect conclusions.”

Telkom’s head of communications, Jacqui O’Sullivan, provided Fin24 with this explanation on its view of the legislation:

“As per the provisions of section 63 (2)(a), once the full value of the coupon, voucher, certificate or credit device, has been redeemed or presented and exchanged for services, goods or future services, then in such case the coupon, voucher, certificate or credit device will be “spent” and will no longer be valid, or have any value.

“An airtime voucher is ‘redeemed’ when a customer loads that airtime onto his or her device.

“In other words once the full value of the coupon, voucher, certificate or credit device has been redeemed or exchanged for goods, services or for future services, then it will no longer have any validity and section 63 and in particular section 63(2) (b) will not apply to the device or transaction.

“Once exchanged or redeemed in full for goods or services or for future services, the provisions of section 63 will fall away and the transaction will then be covered and be subject to the supplier’s standard or specific terms and conditions, if any, read together with the provisions of the balance of the Act, the Common Law and any other law or regulation applicable to the transaction in question.”

O’Sullivan also said that Telkom’s terms and conditions are approved by the Independent Communications Authority of South Africa (Icasa).