Earning the Trust of Customers and the Public

In the normal course of business we engage with important stakeholders in the marketplace including our customers, business partners, regulatory bodies (ICASA and the Competition Commission) and industry bodies such as the Wireless Application Service Providers Association (“WASPA”). Nurturing these relationships, not only through the quality of our products and services, but also the integrity with which we conduct our business in the market place, will win us the loyalty to sustain Vodacom’s growth in the long-run. Feedback from our stakeholders suggests that while Vodacom enjoys a strong reputation among the South African public, there is scope to further improve our relationships with our business partners.

Competition

The Group’s competitive environment is also changing, with market liberalisation a feature in all our operating markets.

Market liberalisation

This year, around 250 individual electronic communications service (“ECS”) and electronic communications network service (“ECNS”) licences were awarded under the ECA. While Vodacom SA welcomes this development, we are concerned about the pressure on the limited spectrum available and are engaging with ICASA to determine how this scarce resource should be allocated and most effectively utilised.

RICA

The government’s intention to implement RICA which requires operators to register customers prior to giving them access to their networks, as well as similar legislation in our other African markets, has major implications for the telecoms industry. Vodacom has been an active participant in the industry-wide RICA process and in most cases has led the initiatives around the registration process. We await confirmation from government on when the Act will be implemented.

Clear and transparent pricing
ICASA handset subsidy regulations

South Africa was one of the first countries to offer a handset plus airtime package, enabling many customers access to handsets by entering into 24-month contracts. Vodacom understands and supports ICASA’s intention to require providers to show clearly what each element costs, as well as the costs of opting out of these contracts.

Consumer Protection Bill

The key provisions of the Consumer Protection Bill (“CPB”) include the right to choose, the right to disclosure of information, fair and responsible marketing, honest dealing and fair agreements, fair value, and accountability of suppliers. The CPB specifically prohibits bundling, or tying of products and services, and provides for a cooling-off period, as well as cancellation by the consumer on 20 days notice, with the penalty for long-term agreements pegged at 10%.

Protecting vulnerable users

While mobile phones have brought revolutionary benefits to society, adult or inappropriate content can be accessed through various channels such as SMS, MMS, USSD and the internet. The introduction of Location Based Services (“LBS”) has added to the risk of abuse, particularly by Wireless Application Service Providers (“WASPs”).

Since 2004, WASPA has played a critical role in governing this industry through the enforcement of the WASPA Code of Conduct. This year, WASPA has instituted stricter measures to ensure fair business practice. These include the implementation of tighter rules, effective monitoring and control, and stricter sanctions against WASPs who breach the Code of Conduct. WASPA provides monthly reports which include the results of media monitoring, and surveys are conducted to gain customer insight into the services provided by WASPs.

Vodacom subscribes to Vodafone standards in our approach to adult content on our portals, with limited content equating to a PG13 rating for films. Various initiatives help to ensure responsible delivery of this content, including access control, warning screens, an ‘opt-out’ mechanism and parent’s guide to protecting children from harmful content. All WASPs utilising Vodacom’s network to provide content services must comply with all applicable laws (including the Films and Publications Act, 1996), the WASPA Code of Conduct and WASPA Advertising Guidelines. Vodacom’s Regulatory division participates in all initiatives pertaining to policy and legislative developments relating to the protection of children against inappropriate content.

Privacy of customer information

Customer information can potentially be compromised in a number of areas, from the handling of billing information at data centres to the various services being offered over a network through business partners, in particular WASPs.

Vodacom Group has various policies, procedures and processes in place to ensure that information is not unlawfully disclosed. Vodacom employees cannot intercept calls, SMSs or any other type of messages sent from one person to another. This information can only be intercepted if properly authorised in terms of the provisions of the RICA.

Due to the potential infringement of customer privacy associated with the use of LBS, Vodacom SA has instituted strict guidelines for its provision to WASPs. Providers are audited prior to the approval of the deployment of LBS and users have to consent to being tracked. Technology is used to enforce compliance and various sanctions, including the suspension or termination of service, may be imposed against a WASP in breach of Vodacom’s business rules. These measures have restricted the violation of privacy rules on the Vodacom network. Vodacom SA measures the extent of violations of these rules and aims for zero incidents.

Vodacom SA (and the mobile communications sector in general) supports WASPA in its efforts to ensure consumer protection in the sector, both in terms of providing financial resources and by enforcing the industry Code of Conduct. Vodacom SA is also a signatory to the Code of Conduct for Cellular Operators which commits us to adhere to certain standards, ensuring protection of consumers against harmful behaviour by WASPs using the company’s network.

Radio frequency emissions and health

Mobile phones, together with the base stations that comprise a network, emit electromagnetic fields (“EMF”) or radio frequency (“RF”) fields. The World Health Organisation (“WHO”) database shows that there are more than 1 900 published scientific articles on the biological and health effects of RF fields, and more than 630 studies on RF specifically used by mobile phone networks. These show that there is no evidence to convince experts that exposure below the international guidelines set by ICNIRP carries any health risks for adults or children. However, integral to the evaluation, gaps in scientific knowledge have been identified that need to be addressed before the WHO will conclude its international EMF risk assessment programme.

Until the WHO concludes its international risk assessment, we will continue to align the Group’s EMF policy with the WHO’s best practice recommendations. As a responsible business, we are committed to stay abreast of all relevant developments in scientific research and communicate significant findings to the public.

Vodacom makes use of sophisticated testing equipment and extensive procedures to ensure compliance.

• Base station exposure – Vodacom ensures that levels of exposure are below the established international safety limits. The WHO states: “Guidelines have been developed by the International Commission on Non-Ionizing Radiation Protection (ICNIRP, 1998) to ensure protection against the scientifically established health effects associated with RF fields. The public exposure levels associated with base station technology are typically orders of magnitude below the ICNIRP recommendation and handset devices are designed to operate well within those limits likewise stated by the WHO as safe.”

• Handset exposure – RF exposure to a user of a mobile phone located a short distance from the handset (as when used with a hands-free appliance) is far lower than when a user places the handset against the head. RF exposure to people nearby is very low. New services, like text messaging, picture messaging, internet and email, also reduce the exposure to RF, because the handset is held further away from the body when using these services. The WHO suggests other measures to reduce exposure such as keeping calls short and keeping the mobile phone away from the head and body when not in use.