Understanding the Flow of Mobile Content Premium Rated Services

There needs to be more awareness among South African consumers as to how premium rate content services actually work, even though many frequently download information, images, ringtones, music, games, video clips, and wallpapers to their cellphones in response to an advertising campaign. As the mobile content industry is relatively new, and these services are often used by children, education is critical to avoid unscrupulous business practices.

Understanding the Flow of Mobile Content and Money

When a consumer purchases mobile content after sending an SMS to a premium-rated short code, there is a difference in how that content is delivered to the cellphone and how the billing works for that mobile content. Each of these is illustrated in the boxes below.

The flow of money

Cellphone user >>> Service Provider (e.g., Nashua, Autopage, Vodacom Service Provider, MTN Service Provider, Cell C Service Provider) >>> Mobile Network Operator >>> Wireless Application Service Provider >>> Content Provider.

The flow of mobile content

Content Provider >>> Wireless Application Service Provider >>> Mobile Network Operator (Vodacom, MTN, Cell C) >>> cellphone user.

Note that the Wireless Application Service Provider Association (WASPA) is not engaged in delivering content or billing anyone. The Service Provider knows who is billing you but is not involved in delivering the content at all. The Service Provider knows who is billing you but is not engaged in delivering the content at all. In dealing with consumer complaints about mobile billing for content services, WASPA has to rely on the Service Provider or Mobile Network Operator to identify the Wireless Application Service Provider and Content Provider.

Once-Off Mobile Content vs. Subscription Services

Confusion between once-off mobile content downloads and subscription services results in consumers inadvertently signing up for a subscription service. They receive ongoing mobile content and are billed continuously instead of once-off as with a premium rate SMS. Most people must learn how to stop a subscription service or what recourse is available to lodge complaints against it.

Subscription services are long-term mobile content services where a consumer is billed at regular intervals on an ongoing basis. Popular subscription services include cartoons, pop culture gossip, weather updates, religious messages, motivational messages, tips for weight loss, adult content, horoscopes, daily news feeds, and the latest rugby or cricket scores.

Subscription services benefit consumers by receiving requested mobile content daily, weekly, or ongoing. Consumers are not required to re-confirm the repeated billing of the service as they have agreed to the service on subscription. This billing option ensures that a consumer will pay less for content than downloading single purchases over a fixed period. For example, a single weather alert costs R2.00 per download. Over a month, this would have cost R60.00 for a download per day, and the cost would increase if more than one request for content was made daily. A monthly subscription service for the same content is charged at R20.00 per month.

The uptake of mobile content subscription services in the market has occurred because of the success of premium-rate SMS. Both once-off premium rate SMS and subscription services involve sending an SMS with a keyword (e.g., AB123) to a shortcode (e.g., 35010). Due to the similar nature of the subscription service and a once-off premium rate SMS, consumers need clarification on subscription services with once-off premium rate SMS billing for mobile content, even when adverts clearly state the word subscription. As a result, many consumers need to be made aware that they have purchased a subscription service.

Consumer Concerns about Subscription Services

The inadvertent downloading of mobile content via subscription services exposes consumers to unexpected data charges. These data charges are in addition to the initial premium rate SMS cost. The most widely publicized instance of consumer complaints against the promotion of a subscription service was a few years ago in the United Kingdom. MBlox and Jamba's Crazy Frog ringtone campaign came under fire as consumers complained to the industry regulator that the advertising for the service was confusing and unclear as to the costs of the service. Most of these consumers indicated that they were under the impression that there was a once-off payment for the ringtone. They were unaware that the purchase was a subscription to ongoing mobile content services. As the service provider, the UK regulator ruled that MBlox was liable for a fine and was required to reimburse complainants.

Consumers must be able to quickly identify a service's cost and billing implications before selecting mobile content downloads. In many cases, consumers realize they are subscribed to a service only after receiving content on several occasions. Some services, however, do not even involve receiving content; for example, when a mobile club is joined. Mobile clubs offer consumers access to a community of mobile users and content services, although consumers can interact with something other than this club. Consumers with a contract should monitor their cellphone usage via itemized billing and identify whether they are charged for subscription services. Pre-paid consumers should call their network provider and ask them to check their billing records to determine if they are being billed for subscription services.

Advice to parents

Check your and your child's cellphone bill regularly, and your child must know how to monitor them. A reputable Service Provider will list all premium charges separately on the cellphone bill and indicate the Wireless Application Service Provider (WASP) involved. The contact details of all WASPA members are listed on www.waspa.org.za. You can also:

• Set a reasonable mobile spending limit for your child. If your child is using a phone linked to your phone contract, request that your Service Provider place a spending cap on the phone.
• Parents must ensure that their children know all the charges related to premium-rated mobile content services BEFORE making a purchase.
• Children must be able to spot "subscription" services.
• Children must know how to terminate any subscription service.

Misleading advertising for subscription and premium rate services or problems with unsubscribing from these services must be reported to WASPA.

Children must know how to block any mobile subscription service to terminate content billing. Refer to our STOP ALL SUBSCRIPTIONS section.