South African telecommunication company MTN has been fined ZAR 5 Mn by Independent Communications Authority of South Africa (ICASA) for non-compliance.
ICASA says the telecommunications company failed to comply with the seven days notice period provided by law before hiking the price of its one gigabyte monthly WhatsApp bundles. ICASA charged that MTN implemented the price adjustment after giving only two working days notice.
“ICASA would like to confirm that indeed a fine of ZAR 5 Mn was issued to MTN for contravening Regulation 9 of the Standard Terms and Conditions, of which ZAR 2 Mn is suspended for three years as from the date of issue of the council’s order in this matter,” said Paseka Maleka, ICASA’s spokesperson.
The telco will be required to pay the remaining fine of ZAR 3 Mn to ICASA within 90 working days after the issue of this order.
In April last year, the mobile operator launched social media bundles and a monthly WhatsApp bundle of 1GB for ZAR 10 was introduced. The new package attracted many WhatsApp users and MTN reported WhatsApp usage in its network had increased by 300 per cent in just two months with millions of South Africans buying these low-cost bundles.
Three months after introducing the social media bundle package, MTN South Africa hiked the price for many users by 200 per cent. The telecom said the huge spike in traffic meant that they had to urgently invest in its 3G infrastructure to accommodate the traffic driven by demand for WhatsApp.
“The earlier implementation of the price increase was forced by technical risks whose eventual occurrence could have been catastrophic,” the ruling stated.
“The volume of traffic on the WhatsApp bundle was unprecedented, and thus it presented novel challenges to MTN.”
MTN added that it was pushed to hike the price of the bundle before the notice period elapsed to avoid potential disaster.
“We were very aware of the required ICASA timing, which is why we applied for leniency, but this was a tough situation, and, at the time, we did what we felt necessary to protect the connectivity of millions of South Africans,” MTN South Africa Executive for Corporate Affairs Jacqui O’Sullivan said.
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