Sinawo Thambo

EFF MP and National Spokesperson Sinawo Thambo has taken mobile network operators to task in Parliament over the contentious issue of expiring data and airtime. During a recent session of the Portfolio Committee on Communications and Digital Technologies, Thambo confronted representatives from South Africa’s major mobile operators—MTN, Vodacom, Cell C, Telkom, and Rain—demanding answers on why consumers lose unused data and airtime they’ve paid for. He labelled the practice as exploitative and a violation of consumer rights, sparking a heated debate on fairness, digital inclusion, and the need for regulatory reform in the telecommunications sector.

A Clash Over Consumer Rights

Thambo’s grilling of mobile operators centred on a fundamental question: why should data and airtime expire when they aren’t perishable goods like food? “Data and airtime do not spoil like food items. Why should they expire?” he challenged, arguing that expiry policies are a “capitalist exploitation” tactic designed to boost profits at the expense of consumers. He pointed out that these practices hit low-income South Africans hardest, who often can’t afford to regularly top up their accounts, effectively creating a “digital apartheid” that widens inequality.
Mobile operators, represented by their CEOs and the Association of Comms and Technology (ACT), defended their policies. They explained that expiry dates help manage network resources and prevent congestion by discouraging hoarding. Without these measures, they argued, service quality could suffer for all users. However, Thambo dismissed this as inadequate, insisting that consumers shouldn’t lose value they’ve already paid for, regardless of network management needs.
This exchange highlighted a growing tension between consumer rights and industry practices, a debate that’s gaining traction as South Africa pushes for greater digital inclusion.

The Telecommunications Sector Under Scrutiny

The committee meeting wasn’t just about expiry policies—it also tackled broader challenges and opportunities in South Africa’s telecommunications landscape. Mobile operators shared insights into their investments, innovations, and struggles, painting a picture of a sector in transformation.
Network Expansion and Technological Advances

• MTN: Boasting a 99% 2G coverage and 44-45% 5G coverage, MTN has invested R95 billion over the past decade, with R9 billion annually on capital expenditure. They’ve introduced affordable 4G smartphones at R99 to bridge the digital divide.
• Vodacom: With 99.9% 3G coverage and 51.7% 5G coverage, Vodacom pledged R60 billion over the next five years, building on a previous R50 billion investment. Their “Easy to Own” programme offers smartphones for as little as R5 a day.
• Telkom: Having pivoted from copper to fibre, Telkom has passed 1.3 million homes with fibre and covers 85% of the population with its mobile network, reaching 99% through roaming agreements.
• Cell C: After shifting to a capex-light model, Cell C roams on 28,000 sites, achieving 96% coverage. They’ve pioneered innovations like Africa’s first cloud-native voice-over-LTE solution.
• Rain: South Africa’s 5G pioneer, Rain covers 35% of the population with 5G and 61 million people with 4G, offering unlimited data packages to simplify pricing.
  These advancements show a sector racing to embrace 5G, fibre, and IoT (Internet of Things), but challenges like load shedding, vandalism, and regulatory uncertainty threaten progress.
  Industry Challenges
• Load Shedding: Operators spent billions to keep networks running during power cuts. MTN alone spent R4 billion in 18 months, while Vodacom and others echoed the strain on resources.
• Vandalism: Over 2,000 Telkom sites have been hit in three years, costing R300 million. Rain reports 1,400 monthly outages, impacting service quality.
• Regulatory Gaps: The Electronic Communications Act (ECA) is outdated, with calls for a comprehensive review to address over-the-top (OTT) services like Netflix and modernise licensing.

Data and Airtime Expiry: A Consumer Rights Flashpoint

Thambo’s critique resonated with committee members, who see expiry policies as a barrier to digital inclusion. Low-income consumers, unable to use data before it expires, lose out the most, undermining efforts to connect all South Africans. Advocacy groups have long echoed this sentiment, with complaints piling up about the fairness of these rules.
Globally, South Africa’s policies lag behind. In India, some operators offer data with no expiry, while others extend validity periods significantly. Here, the lack of strict regulation allows operators to set their own terms, often to the detriment of users. Thambo and others urged the Independent Communications Authority of South Africa (ICASA) to step in and review these practices.
Operators countered that expiry encourages usage and prevents network strain, but they’re not deaf to the criticism. Some have experimented with longer validity or rollover options, hinting at potential shifts if pressure mounts.

Digital Inclusion at Stake

The expiry debate ties into South Africa’s broader goal of bridging the digital divide. With initiatives like the National Broadband Plan and Digital Economy Master Plan, the government aims for universal connectivity. Yet, policies that limit access—like data expiry—could derail these efforts.

• Affordability Initiatives: MTN’s R99 smartphones, Vodacom’s daily payment plans, and Cell C’s R29 for 3GB bundles show operators responding to cost concerns. Data prices have dropped significantly—Vodacom’s 1GB bundle fell from R149 in 2019 to R85 in 2021, with 5GB now at R99.
• Rural Coverage: Telkom’s fibre rollout, Rain’s 5G expansion, and Vodacom’s 95.4% rural coverage target by FY23 reflect efforts to reach underserved areas.
• Education and Skills: Vodacom’s eSchool platform, Telkom’s Light Bulb initiative, and Rain’s 330 computer labs aim to boost digital literacy, especially among youth.
  Despite these strides, device affordability remains a hurdle. Operators welcomed National Treasury’s removal of luxury tax on phones under R2,500 but called for zero-rating VAT on all handsets to accelerate adoption.

Calls for Regulatory Reform

Thambo and committee members pushed for ICASA to intervene, suggesting tighter rules on expiry policies. The ACT cautioned against hasty changes, urging a balanced approach that considers technical and economic impacts. They stressed the need for a full ECA overhaul, not piecemeal fixes, to address OTT services, spectrum allocation, and consumer protections.
Key regulatory asks from operators included:

• Spectrum Flexibility: MTN and Telkom want secondary markets for trading underused spectrum, arguing it could lower costs.
• Infrastructure Sharing: Vodacom and Telkom proposed co-building networks to cut rural rollout costs.
• Policy Certainty: Rain highlighted the need for stable rules to support long-term investments in next-generation networks.
  The committee committed to further investigation, promising collaboration with ICASA and stakeholders to find solutions that protect consumers without stifling industry growth.

Economic and Social Impact

Expiring data and airtime don’t just frustrate consumers—they have economic ripple effects. Lost value discourages spending on digital services, potentially slowing the digital economy’s growth. Trust in operators erodes, impacting customer loyalty—a critical factor as competition intensifies with MVNOs (mobile virtual network operators) and new entrants like Rain.
Socially, the practice exacerbates inequality. Rural and low-income users, already struggling with access, bear the brunt, while urban, wealthier consumers can better navigate expiry limits. This misalignment with South Africa’s inclusivity goals has sparked calls for change from both lawmakers and the public.

Industry Innovations and Commitments

Beyond expiry, operators showcased efforts to align with national priorities:

• MTN: A level-one BEE contributor, MTN spent R43 billion on black-owned businesses and supports 1,300 SMEs.
• Vodacom: Invested R20 billion annually in black-owned firms, with R4.4 billion for small suppliers, and runs STEM programmes like Code Like a Girl.
• Telkom: Incubates 2,600 SMEs via its Future Makers programme, transitioning them into sustainable businesses.
• Cell C: Partners with MVNOs for 19 years, enhancing competition, and supports gender-based violence victims through digital skills training.
• Rain: Connected 2,166 public institutions and offers unlimited data to simplify access.
  These initiatives signal a sector aware of its social responsibility, yet the expiry issue remains a sticking point.

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