Cellular21.06.2024

Major ruling for uncapped services in South Africa

The Advertising Regulatory Board (ARB) has ruled against Melon Mobile over advertising uncapped packages that are not genuinely uncapped.

The ruling further clarifies how the industry regulator allows network operators to use the term “uncapped” in their marketing material.

The complainant, Alex Alagiozoglou, submitted a Melon Mobile advert for a bundle offering 50GB of data, uncapped minutes, and text messages for R599 per month.

The ARB found in favour of Alagiozoglou, who said Melon Mobile’s claims of uncapped minutes and SMSes were false, as it implements a fair usage policy (FUP) that hard caps minutes and SMSes once a certain threshold is reached.

Although Melon Mobile isn’t an ARB member, it submitted a response to the complaint to place all relevant facts before the regulator. However, it noted that it wouldn’t submit to the ARB’s jurisdiction.

It submitted its full terms and conditions, which include details on the fair usage policy and other relevant information. It said any user can access its terms and conditions by clicking the link.

Furthermore, it said customers are presented with the terms and conditions when submitting an application, which must be accepted for the application to proceed.

“There is no suggestion that it offers ‘Unlimited’ minutes and texts as suggested by the complainant,” it said.

“Its pre-determined limitations are clearly stipulated in its terms and conditions.”

It also highlighted old Advertising Standards Authority rulings where the terms “uncapped” and “unlimited” were differentiated.

It said “uncapped” is permissible when throttling and implementing speed limitations, as one’s connection is never completely severed.

“Unlimited” implies that there are absolutely no limitations, regardless of what a customer consumes.

It’s important to note that Melon Mobile has changed the wording on its products from “uncapped” to “unlimited”.

The ARB found Melon Mobile to have breached the Advertising Code of Practice and advised its members not to accept any marketing from the MVNO claiming to offer uncapped SMSes or minutes.

The fair usage policy applied to Melon Mobile’s Unlimited products per its terms and conditions is summarised in the table below.

Melon Mobile Unlimited FUP
Plan Allocation FUP limits Price
Melon Unlimited 5GB 5GB data; unlimited minutes; unlimited SMSes 750 minutes; 750 SMSes R199
Melon Unlimited 10GB 10GB data; unlimited minutes; unlimited SMSes 1,000 minutes; 1,000 SMSes R299
Melon Unlimited 15GB 15GB data; unlimited minutes; unlimited SMSes 1,500 minutes; 1,500SMSes R399
Melon Unlimited 25GB 25GB data; unlimited minutes; unlimited SMSes 2,000 minutes; 2,000 SMSes R499
Melon Unlimited 50GB 50GB data; unlimited minutes; unlimited SMSes 2,500 minutes; 2,500 SMSes R599

MyBroadband reported in May that Melon Mobile planned to reintroduce unlimited minutes and SMSes on its uncapped plans following a slew of customer complaints.

It received backlash from customers when they saw that the MVNO had started hard-capping the allocations.

Melon Mobile said that when the offering launched, its platform didn’t have a mechanism to allocate unlimited SMS messages and voice minutes. Therefore, it loaded the maximum number of SMSes and minutes it could.

“We are working on a new mechanism that will automatically allow unlimited allocations,” it said.

In the interim, customers were required to contact Melon Mobile support for additional SMS and minute allocations if they reached the hard cap.

It added that it had plans to launch an automatic abuse protection system by the end of May 2024.

MyBroadband asked Melon Mobile whether the system had gone live, but it didn’t immediately answer our questions.

The ARB ruling has implications for network operators other than Melon.

For example, MyBroadband spoke to Vodacom about its hard-capping of “uncapped” Home Internet 5G products in October 2022.

Hard-capping occurs when the mobile operator completely cuts connectivity from a user’s account once they reach a set threshold.

While FUPs are generally accepted for uncapped products, operators may not cut subscribers off. Throttling, traffic shaping, and other usage control mechanisms are permitted.

Vodacom told MyBroadband at the time that it implemented hard caps on its “uncapped” packages to ensure that all customers receive “the best quality connectivity”.

It said high data usage through a single tower in a densely populated area could hinder 5G connectivity as both uncapped 5G products and regular mobile 5G services run off the same site.

“In order to ensure the best quality connectivity for all our customers (on 5G Uncapped or mobile products), we have implemented this hard lock,” they added.

Following the backlash, Vodacom stopped referring to its products as uncapped. Instead, the deals now clearly state that they are subject to a cap. Unfortunately, it still confusingly refers to it as a fair usage policy rather than a cap.

Vodacom’s Home Internet 5G plans

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