Killing OOB data will not hurt revenue in the long term – Vodacom

The banning of out-of-bundle billing without subscriber consent will have a “modest” impact on data revenue growth, Vodacom said in a recent trading update.

This follows the publication of the amended End-User and Subscriber Services Charter from ICASA.

Under ICASA’s new regulations, all Internet service providers – including mobile networks – are prohibited from charging subscribers for out-of-bundle usage without consent.

They also require networks to offer the ability to roll over unused data, and allow the transfer of data to another subscriber on the same network.

Cell C has launched a legal challenge against the implementation deadline of the new regulations, however, which MTN has joined.

All four of South Africa’s major mobile network operators requested an extension for the implementation deadline of the new rules, as they needed more time to make the necessary technical changes.

ICASA declined the extension, stating that it was not in the public interest. This resulted in Cell C approaching the court for an urgent interdict.

The regulator has stated it will fight the application brought by Cell C.

Financial impact of anti-OOB regulations

Industry speculation suggested that Vodacom and MTN will be particularly hard hit by ICASA cracking down on out-of-bundle usage.

This is because mobile networks charge more for out-of-bundle data usage compared to what users pay per megabyte if they purchase a data bundle.

Even using a few megabytes of out-of-bundle data can result in a much higher bill than what a user will typically spend when in-bundle.

However, all mobile networks have expressed a willingness to implement ICASA’s regulations. They just need more time to make the necessary adjustments, they said.

Vodacom even stated in a recent trading update that it doesn’t foresee a significant impact on its performance due to the regulations.

“We expect this [modest impact on data revenue growth] to be mitigated in the short term by continued uptake of data bundles and strong elasticity in demand for these services,” said Vodacom.

Now read: How Vodacom grows its network despite red tape

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Killing OOB data will not hurt revenue in the long term – Vodacom