Mobile promo prices misleading: Icasa CEO
Cellular subscribers in South Africa are not given a sense of what they are actually paying, Pakamile Pongwana has said.
Pongwana, formerly head of Vodacom’s regulatory affairs, is the new CEO of the Independent Communications Authority of South Africa (Icasa), but was answering a question in his personal capacity.
He was asked to respond to the findings of a “secret” 2012 report, which suggested that poorer South Africans actually received relatively good value for money on cellular services compared to those with higher incomes.
In his personal view, Pongwana said the results may be misleading in one sense: the poorest of the poor are reliant on promotions.
“It may seem cheap, so long as the promotion is applicable,” Pongwana said. “Once the promotion is gone where do the tariffs revert to?”
For this reason, Pongwana said he believes promotions mislead when it comes to calculating the costs people pay. When you factor in temporary, promotional prices you get one result, but when you don’t take them into account you get another, Pongwana said.
Pakamile Pongwana
“That’s why we have this view that we have to get a certain level of price transparency,” Pongwana said.
When asked how they might incentivise operators to rather file reduced permanent tariffs with Icasa instead of running promotions, Pongwana said matter-of-factly, “Well, Nigeria banned them.”
“I’m not saying we’ll do that in South Africa, [but] when they banned them [in Nigeria] they started seeing prices for what they are,” Pongwana said.
Another option Pongwana said could be considered, is automatically turning promotions into the “applicable tariff” if it runs for longer than a certain period, or filed in another form.
Asked if this means that Icasa wants to regulate South Africa’s mobile tariffs, Pongwana gave an unequivocal “no”.
“Retail tariff review is a protracted type of thing and I know of no jurisdiction that has done that successfully,” Pongwana said.
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