Vodacom has led the charge in Parliament among cellular network companies arguing before a parliamentary committee that the National Credit Bill should not be made applicable to cellular telecommunication service contracts.
In a written submission on Wednesday to the National Assembly trade and industry portfolio committee, Vodacom said the respective rights and negotiating powers between cellular operators and consumers are “to a considerable extent” balanced.
“This balance is due to the fact that, in order to obtain a cellular telecommunications service from a cellular operator, a customer need not enter into a subscriber contract with a cellular operator. There is an equivalent alternative in the form of a prepaid package that a customer can purchase in order to gain access to a cellular service.”
In terms of the Bill — which is the subject of public hearings before the committee — its provisions apply to every credit agreement between parties dealing at arm’s length and made within the republic, with a few exceptions, including a credit agreement between stokvel members or between family members.
Vodacom noted that President Thabo Mbeki said in his State of the Nation address last year that there was a need to lower the cost of doing business in South Africa.
Vodacom submitted that compliance with the requirements and administrative procedures of the Bill “will substantially increase the cost of conducting business across most of the sectors of South Africa’s economy”.
In another submission, MTN and Cell C expressed similar concerns.
MTN executive of regulatory affairs Nkateko Nkoya and Cell C head of regulatory affairs Karabo Motlana said they are concerned that the services provided to contract customers by their companies “may fall within the ambit of the Bill and therefore be subject to regulation as provided in the Bill”.
In providing voice and data services to “post-paid” customers, the contract stipulates that the subscription for accessing the service is paid in advance, and payment for the use of air time and data is paid monthly in arrears.
The contract is similar in nature to contracts for the provision of services such as water, electricity and fixed-line telephones, they argued.
Their services should therefore fall outside of the ambit of the legislation, they said.
One of the objects of the legislation is to give the minister of trade and industry the powers to regulate the cost of credit and to allow the minister to establish an interest cap and other cost controls and prohibit interest or other costs in excess of prescribed rates.
It also spells out training requirements in terms of the legislation by credit providers and a complex identification system of such credit providers. — I-Net Bridge