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The year in review for SMS

Published: 14 December 2012

This was the year when the SMS interconnect fee issue finally came to a head, with Cell C forcing the issue by breaking the existing gentlemen’s agreement between the network operators. So says BulkSMS.com's managing director, Dr Pieter Streicher.

The year in review for SMS
It also saw the opt-in/opt-out debate being settled with the forthcoming passing of the Protection of Personal Information Bill (POPI) – happily key clauses were not as watered down as initially feared. And in a major step forward, Vodacom’s double opt-in capabilities have had a dramatic impact on reducing the number of complaints about subscription service sign ups.

SMS internetworking fees

The issue of no SMS interconnect fees being in place – the basis of a gentlemen’s agreement between the major mobile operators not to compete when it comes to terminating application-to-person (A2P) SMS messaging traffic – first bubbled up at the end of last year when new entrants, including Neotel and Telfree, took advantage of no fees for inter-network SMS connections and simply terminated A2P traffic over the incumbents’ networks. This was soon put to an end but then the apple cart was well and truly upset when Cell C – a far more formidable opponent – started allowing a single WASP to terminate messages on other networks this year.

This could have a major impact on the revenue of Vodacom and MTN because they are in effect terminating Cell C’s traffic for free. It will be interesting to see how long this state of affairs continues. Will Vodacom and MTN force Cell C to stop this practice, or will the Independent Communications Authority of South Africa (ICASA) step in and enforce SMS interconnect fees? The legislation is in place to do so but it needs to be enforced.

Key to how this plays out depends on Vodacom realising that although it stands to lose a bit of money if interconnect fees are introduced, at the end of the day, as the largest operator, it is actually in the pound seat as the most traffic will terminate on its network. Cell C, on the other hand, has the most to lose as a smaller network.

In my view, the bulk pricing of SMS messages for WASPs or emergent operators should be the same, and regulated by ICASA and governed by the Electronic Communications Act, allowing healthy competition and a level playing field for all.

Opt-in electronic marketing

Despite my initial concerns, POPI was not watered down as drastically as it looked like it might be earlier this year, despite lobbying by the Direct Marketing Association of South Africa (DMASA). The law will work on the basis that customers must opt into marketing messages when they first supply their cellphone number to a company and from then on be given the chance to opt out.

Significantly, although companies are allowed a single opportunity to request consent from non-customers, the rules around how this is done are strict. No marketing messages may be included in this request for consented to communication, and companies won’t be able to simply change their names and try again under a different brand. Finally, the legal definition of consent was not watered down – consent for marketing communications needs to be both explicit and informed. In this regard, the Wireless Application Service Providers’ Association (WASPA) code of conduct is already compliant with POPI.

When it comes to the Consumer Protection Act (CPA) Regulations, however, there has been no movement on the creation of a “do not contact” registry. Indeed, budget has yet to be allocated for it. While the DMASA wants its existing do not contact list to be used, in my opinion the unnecessary information the DMASA requests dissuades people from actually using it. I would suggest that all you need to verify that a person is who they say they are is their cellphone number.

Spam

It is now difficult for spammers to bypass the local networks and WASPA’s jurisdiction by using international routes, which means that in excess of 90% of South African A2P traffic can be traced back along identifiable routes. This allows WASPA to more effectively track down spammers, fine them, and in worst-case scenarios, expel them all together from the industry body and so expel them from operating in the South African market completely. The increase in adjudications and repeat offenders can be seen on the WASPA site. It is still important however that consumers escalate spam complaints via official channels to allow WASPA to investigate effectively and prevent other consumers from being spammed.

Double opt in

WASPA has seen Vodacom related unsubscribe requests drop from 70,000 to 20,000 over the course of the year thanks to Vodacom introducing a double opt-in mechanism for mobile subscription services. While previously customers would be able to sign up for a subscription service at the click of a button, now Vodacom confirms the subscription – adding in traceability in the case of fraud, and ensuring the customer is completely aware that they are signing up for an ongoing service. This prevents consumers accidentally signing-up for a service.

So while the jury is out on a number of issues that affect the SMS industry, on the whole, industry players have taken some major steps forward in protecting consumer rights and maintaining the integrity, and so the value, of mobile as a medium for business communications and transactions.

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