Does your cellphone network have your back?

2013-05-24 10:52

In response to the flurry of reader feedback to the article on our website on May 19 about wireless application service providers (Wasps), we take a closer look at the environment in which they operate.

Read: Are you mysteriously losing airtime? Here’s why

In that article, the Wireless Application Service Provider’s Association (Waspa), which regulates Wasps, was highlighted as a point of contact for frustrated cellphone users who have received no assistance from either their networks or Wasps after having been charged for mobile content without their consent.

In the original version of this follow-up article, published for the first time on May 24, City Press had been advised to attribute responses from Waspa to its chairman, Leon Perlman, but the public relations agency representing the regulator, Intrinsic Media, has since requested that all Waspa responses be attributed to a statement from the regulator, rather than its chairman specifically.

The Waspa’s code of conduct states that it is “an independent, nonprofit organisation representing the interests of organisations providing mobile-application services in South Africa”. The statement reads that the regulator also aims to “ensure that consumers use Wasp services with confidence”.

Waspa’s organisational structure comprises a management committee (mancom), on which the chairman serves; an aggregators committee; and a code-of-conduct committee. Six of the Waspa’s seven mancom members are directly associated with various Wasps in different capacities.

For example, as per Waspa’s organisational structure, Janene Matsukis of Smartcall Technology Solutions, the company City Press Online reported on on May 19 that raised the ire of many users, is Waspa’s lobbying working group co-chair, as well as its public relations working group co-chair.

According to the statement, Waspa “assists thousands of consumers every month to cancel services they no longer wish to use”.

The regulator, according to the statement, receives between 15 and 30 formal complaints a month regarding mobile content charges, and also “deals with unsolicited direct marketing messages (spam)”.

With the introduction of stricter consumer protection laws – outlined in the Consumer Protection Act and, more recently, the Protection of Personal Information Act – it seems consumers now have a firm legal standing to seek recourse should they feel their rights have been violated.

In this regard, according to the Waspa’s statement, the regulator’s code of conduct is “adapted based on new legislation such as the Consumer Protection Act and the Protection of Personal Information Act”, and that the National Consumer Commission, the state’s Consumer Protection Act enforcement agency, could do more to “help Waspa where it has difficulty enforcing its sanctions”.

“Currently, Waspa is having difficulty in enforcing 31 adjudications over a period of four years against a single Wasp as a result of complex legal issues,” reads the statement. It further reads the National Consumer Commission should also “assist Waspa in lobbying for better controls at network level”.

The regulator faces many challenges in this complicated segment. A Wasp insider, who preferred not to be named, says that Waspa has two sets of members – subscription-service companies and bulk-SMS companies – which “have very different needs”. This while consumers are wedged uncomfortably in the middle, at times unaware of whether they’ve opted in to mobile-content subscriptions, or if they’ve agreed to receive direct marketing via SMS.

All the while, primarily and knowingly subscribing to their respective networks.

So it seems it’s key for cellular companies to implement the double opt-in system to root out any nonconsensual subscriptions and unsolicited direct marketing from the word go.

The double opt-in system entails subscribers receiving a confirmation request directly from their networks after having initially “opted in” to a Wasp service either by clicking or tapping on a link or by responding to a direct marketing SMS.

“I think the mobile network operators should take a stand and implement double opt-in. If this had to happen, I think the complaints would drop drastically,” said the insider.

Last week, MTN’s Kevin Jacobson stated that the network “enforces a double opt-in requirement for customers”. But the insider differs, saying Vodacom is the only network to have done so thus far.

“Waspa did a great job in working with Vodacom to implement double opt-in for subscription services, and has requested the same service from MTN, Cell C and 8ta, but this service has not yet been implemented. It would be great if they followed Vodacom and implemented double opt-in,” the insider said.

And the Waspa agrees. Its statement reads: “Vodacom currently has this (double opt-in) mechanism in place,” adding that all networks are now “busy working towards independent verified double opt-in control” and that “it looks like this will be implemented across the full market within 10 months”.

This week, after clarifying that MTN only indirectly implements the double opt-in system “from the Wasp side”, as per regulations in the Waspa’s code of conduct, Jacobson said that MTN is in the process of building “a highly advanced token-based billing system”.

Token-based billing allows users to first register with a username and password in order to purchase electronic tokens. Once tokens are obtained, users can offer them to Wasps to purchase content.

This system, Jacobson says, “requires an extensive build and implementation process”, and that the network “should have the implementation completed within the current year”.

Until more secure opt-in systems are firmly established across all networks, consumers need to be careful of what they access on their cellphones and what personal information they provide online.

The Waspa statement reads: “In the case of subscription services, cellphone users typically browse the internet and see an advert for a competition – for example, ‘Win a BlackBerry’ – with details of the billing provided on the same page.

“They then enter their mobile number to win the BlackBerry. At this point, the Wasp will already have their number, as the network operator will pass it on to them. You are then subscribed to a service at, say, R5 a day.”

General rules of thumb:

» Don’t enter your mobile number into online forms you are unsure of, or on unsecure websites or mobile sites

» Don’t tap or click on any links from unsolicited direct marketing SMSes or on unsecure mobile-content sites

» Don’t respond in any way to unsolicited direct SMS marketing, even if an option to “opt-out” is given, as this might draw you further into the databases of unscrupulous mobile-content providers

» Big money

With the high level of mobile penetration in South Africa, consumer protection regarding paid-for mobile content stands out as an important issue to tackle – especially when considering the segment’s rapid growth within the mobile telecoms sector.

Locally, it is estimated that mobile content generates between R240 million and R360 million in revenue per year. Globally, annual revenue generated is estimated to be $40 billion (R387 billion). Over the next three years, this is expected to grow by 62.5% to $65 billion in 2016, according to a report by mobile telecoms research firm Juniper, as quoted by earlier this month.

The Juniper report expects that this global growth will be driven primarily by game and video purchases on mobile devices, as mobile content providers concurrently intensify their monetisation efforts through direct operator billing – the form of billing that most, if not all, Wasps employ.

With direct operator billing in place, mobile content providers bypass separate payments via credit cards or vouchers, which are made by customers themselves, and charge for content directly through the networks to which consumers are subscribed, as is done in the case where content charges are deducted on your cellphone contract statements.

» This article was updated after first published

» For any queries, tips or suggestions, email

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