Consumer Commissioner wants to fine cell operators

Should Mohlala succeed it would cost the telecommunications industry billions of rands as all the companies earmarked are major players in the country's rapidly expanding ICT sector.

Presenting a progress report Parliament's Select Committee on Trade and International Relations on Wednesday, Mohlala said that five compliance notices had been issued to Telkom and its cellular operation 8ta, MTN, Vodacom, and Cell C.

Neotel, Mohlala said, was the only telecommunications company to sign a consent agreement with the commission that allows it to ensure that the contracts with its customers will comply with the Consumer Protection Act by 30 October.

"We did an analysis of the major players, namely Telkom and 8ta, MTN, Vodacom, Cell C and Neotel and found that all of them were in breach of the Consumer Protection Act," Mohlala said.

She said the companies were in breach of issues such as the handset refund or replacement situation where if a consumer had received a faulty handset they were entitled to it being either replaced or accepting a refund.

"None of them offered this choice as the Act requires. The Act also states they must provide quality of service (on their networks) and they are not," she said.

Mohlala said the telecommunications companies that refused to sign the compliance order gave the reason that it would get them into legal difficulties.

"However, our argument is simple. If you comply and do what you say you are doing, then there should be no problem," she said.

In terms of the workings of the consumer protection authorities, the Commission investigates and makes a finding and the Consumer Tribunal makes a final ruling. The Consumer Tribunal issued the compliance orders.

The Consumer Protection Act allows for a company to be fined up to one million rand, or, as Mohlala indicated, up to 10% of their annual turnover.

"For them (the telecommunications companies), we will be asking for 10% of their last financial year's turnover," she said.

Mohlala was formerly a councillor at telecommunications regulator the Independent Communications Authority of SA and immediately before becoming Consumer Commissioner was director general of the Department of Communications.

Vodacom's total revenue for the year ended 31 March was 61.2 billion rand, MTN's turnover for the same period was 114.7 billion rand, and Cell C's revenue for the period ended December was 10.2 billion rand. Telkom's revenue for the year ended 31 March was 35.2 billion rand with its 8ta subsidiary turning over 81 million rand.

Mohlala said that complaints against satellite broadcasters Multichoice and Top TV were continuing.

In its reaction Vodacom repeated its August statement by Portia Maurice, its chief corporate affairs officer: "We were surprised to receive a compliance notice from the National Consumer Commission as we already had an amendment process underway and had agreed with them an implementation date of 31 October."

It said that Vodacom had been cooperating fully with the National Consumer Commission in updating its contracts with the regulations published at the same time that the Consumer Protection Act came into force.

"The regulations published in April varied considerably from the draft regulations previously discussed, which necessitated dialogue with the NCC. As a result of this dialogue, the date of 31 October was agreed to implement the revised terms and conditions," Vodacom's statement said.