ICASA has postponed the implementation of its regulations on handset subsidies after Vodacom threatened legal action.
ICASA published its Regulations on Handset Subsidies on June 17, stipulating various guidelines regarding mobile contract periods, service provider contracts and transparency regarding fees and discounts.
The regulations call for, amoung other things:
- Mobile operators must provide consumers with the choice of a six-, 12-, 18- or 24-month contract and clearly show the amount by which the handset is subsidised.
- Service providers may no longer charge for the renewal or upgrading of a contract and re-sellers may not charge a connection fee.
- Service providers may offer discounts on tariffs lodged with the authority. Cell C will not be affected though as it already offers contracts for as short a period as one month.
- Vodacom, MTN and their re-sellers must now indicate the subsidiary and monetary value of their services, including the price of the handsets.
- Contracts must be transparent and easy to understand, including the billing for free and charged airtime.
- Consumers must be informed every month of their remaining installments and what amount of the subsidy is still outstanding as well as what they would be liable to pay should they choose to cancel their contract.
- Such subscribers may not be charged exorbitant "cancellation" fees and must be informed of free airtime still available to them.
The regulations were set to become effective two months after the publication of the regulations on June 17, hence the deadline of August 17, 2008.
Vodacom was however unhappy with the content of some of the regulations. The cellular provider indicated that while due process was followed with issues pertaining to handsets, the final regulations contained other guidelines falling outside of the area of handset subsidies which Vodacom was not given the opportunity to comment on.
Vodacom said that it has no problem with the regulations which deal with handset subsidies, but is not happy that other issues, which do not relate directly to handset subsidies and where Vodacom and other parties were not given the opportunity to comment, were included in the regulations.
Vodacom subsequently launched an urgent application in the Witwatersrand Local Division to set aside the regulations on Handset Subsidies as published on June 17, 2008.
After this legal action ICASA responded by withdrawing the August 17 deadline, pushing the date when the regulations will become affective back to February 2009.
It is not clear whether ICASA will remove the parts of the regulations which do not pertain directly to handset policies or whether they will open the process up again to ask for comment on these matters.