Internet Network

Should Internet Data Bundles Expire?

John WalubengoBy John Walubengo

So last week, the Parliamentary Committee on ICT vowed to investigate mobile operators’ practices that expire internet data bundles that subscribers have purchased. The fundamental argument is that once goods are purchased, they become the customer’s property, who can decide when to consume or expense them.

Another issue the ICT Parliamentary Committee would wish to investigate and understand is why mobile operators throttle or step down customer internet speeds once their consumptions hit a certain threshold, going beyond their designated monthly bandwidth limits or cap.

These are important topics of public interest that members of parliament have a right to question and investigate. This week’s article reviews the issues from the customers’, mobile operators, and regulatory (and legal) points of view.

Customers perspective

 

Of course, as an internet data subscriber or customer, one would prefer to buy and store bundles for as long as it takes and use them as and when it is convenient. The “My Money, My Bundles” slogan has been with us for quite a while now as subscribers demand and equate internet data bundles to property rights.

Some mobile operators offer both options to subscribers; one may buy the non-expiry data bundles or the timed-expiry versions. Of course, there would be price differentials, with expiry versions being cheaper than the NON expiry data bundles since the operators would want to encourage the uptake of the same.

Subscribers also wonder why the operators introduce data caps on the monthly internet tariffs.. For example, a customer paying for a 10 Mbps link per month would find their speeds throttled or stepped down to 1 Mbps once they exceeded a certain data consumption limit during that particular month.

What are the operator’s views on these matters?

Mobile Operator perspective

 

Subscribers forget that mobile operators are, first and foremost, going business concerns and must make reasonable returns to their shareholders and investors.

And this is not necessarily a bad thing—a successful telco operator, in turn, guarantees a reliable communication service to the customer.

A telco operation is a 10–15-year-long heavy investment vehicle. In other words, the investors invested their money and installed a management that they expected would deliver a minimum return on investment in a given timeframe.

Expiry internet data bundles are one way to stimulate rapid consumption and uptake of communication services that would otherwise present a huge sunk cost if no one was using the telco infrastructure. Furthermore, time-bound data bundles are much easier to project in terms of anticipated future revenues compared to non-expiry data bundles.

As for capping and throttling or stepping down customers’ speeds, mobile operators consider this practice as traffic management, especially when it comes to keeping in line with that exceptional ‘super’ user who may be using the network capacity beyond the normal. This is by either reselling the capacity or simply running bandwidth-hungry services like torrents.

What does the regulator say?

 

So far, no comment has been observed from the Kenyan communications regulator.

Indeed, even the South African communication regulator has not pronounced herself on the matter—contrary to popular opinion—and is still under the public consultation stage.

But under the current regulatory rules, licensed operators are free to determine the terms and conditions of the service tariffs unless one is considered and declared an abusive dominant player. In this case, the regulator can now dictate how they price and deliver their communication service.

It will be interesting to see if the parliament, through its investigations, wants to change this global practice or if they elect to modify the law and give the regulator more room to get involved in the nitty-gritty details of how operators would want to structure their offerings to the public.

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John Walubengo is an ICT Lecturer and Consultant. @jwalu.

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