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Ferial Haffajee: Data expiry must expire

Jan 17 2019 06:55
Ferial Haffajee

Back in the Nineties, then-Pension Funds Adjudicator Vuyani Ngalwana shook up the life and investment sector when he ended the practice of front-loading fees at the start of an investment policy and of punitive cancellation costs that could often suck up the biggest chunk of your investment if you could not afford to continue paying. 

Until then, the industry made billions out of these unjust fees, often levied on the working and lower-middle-class, who are the most vulnerable of investors and who need the flexibility to cater for changing life circumstances. It was a gouging business practice waiting to be upended.

Ngalwana deserves a national order for this.

Today’s version of that lousy business practice is expiring data. It is the biggest ruse and we suffer its consequences all the time. Milk can expire. Fruit can expire. Meat can expire. Kleptocratic presidents can expire – thank God. But data cannot expire. 

Yet, South Africans data expires at significant volumes – it’s a folly South African that consumers must make extinct in 2019 in the same way that Ngalwana killed punitive policy cancellation and premium reduction costs in the Nineties.  

The telecommunications companies (telcos) are making a killing out of so-called expired data which they write up as unearned annual profits. It’s price-gouging, and so lucrative that both MTN and Vodacom took the regulator, the Independent Communications Authority of South Africa (Icasa) to court when it tried to make data portable and so stop its expiration.

I’ve been trying to track my data and to better understand how it works. Unless you have hours to sit on your phone and to understand the labyrinthine systems, packages, offers and expiry times, it’s a fools’ game. You are going to lose some of it. Add to this practice, the cost of data in South Africa (which is among the highest in the world and also among countries of a similar size).

It’s clear that while the giant mobile communication companies are fabulous innovators and examples of pride to the South African corporate sector, their business practices are not competitive nor are they making data the economic liberator it is and should be. 

Amandla.mobi, the activist movement for cheaper data, has found that rather being “always on”, working South Africans are most likely to be largely offline. The four biggest mobile communications companies – MTN, Vodacom, Telkom and Cell C – have told Fin24, for its series on data prices, that they need expiry provisions for network planning, which also explains why you have to buy in bundles rather than what you need. 

This means they need to be able to anticipate traffic on the network and sales. This is corporate gobbledygook; the equivalent of you having to buy space on highways before you travel and then having that space expire if you don’t use it when you say you will. Or, the equivalent of having to buy Shoprite (or any retailer's) vouchers before you shop and then losing that value if you don’t shop at your short and allotted time.  

An anachronism

Clever and nimble business people know this is a business anachronism. Rain, the new data network, has a customer focus which means that its data does not expire. Rain’s still tiny, and it is likely to cherry-pick wealthy customers by locating its network in affluent areas, but it is terrific that there are challenger brands to the dominant practice.

Almost twenty years on, it’s difficult to remember a time when you could lose your entire investment because you needed to cancel a policy or needed to reduce your premium payments.

Ngalwana showed the value of independent regulation. Icasa is onto the telecommunications companies, but they are fighting back hard to hold onto their customer gouging practices. It’s time for us data consumers to step up and make data expiry history. 

cell c  |  icasa  |  vodacom  |  rain  |  ferial haffajee  |  data  |  data costs
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