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Technology for the 'good of all'

Professor Wadan Narsey
Saturday, October 28, 2017

Consumers freely adopt advances in technology if they result in greater convenience, lower price and better quality. They shouldn't be forced to do so by governments as is currently happening.

Unfortunately, two technological improvements in Fiji involving cards have not only conferred benefits to consumers, but also allowed companies to "rip off" consumers.

I refer firstly to the mobile phone service operators; and secondly the eticketing initiative by Government and bus operators, with Vodafone strangely jumping into the ring.

The two examples are related and explain why Vodafone, a mobile company, is involved as a third party in a bus fares transaction, which Dr Neelesh Gounder rightly criticises.

Readers of The Fiji Times should look again at FT articles by Dr Gounder and Savenaca Narube who have rightly criticised the eticket scheme being pushed by Government, bus operators and Vodafone. Both have suggested constructive solutions.

My article is about the "rip-off" and how it can be stopped dead in its tracks, without significantly hurting bus operators or consumers.

Just remember: If anyone stops you in the street and forcibly takes even a dollar from you, no one disputes he is guilty of a "crime"; he will be prosecuted by the police; convicted by the judiciary, and punished with a fine or even imprisonment, if the theft is large enough.

In Fiji, it seems it is not a "crime" when the theft is committed quietly through an electronic card by smooth business operators in coats and ties, and IT experts writing software that cancels (i.e steals) consumer cash and credit.

Remember the

public phones?

Once upon a time consumers who did not have landlines had to go to public phone kiosks owned and operated by Telecom Fiji, where consumers put cash (usually coins) into slots and used the phones until the credit ran out. Most gladly paid up without complaint because rarely did the phones ever "eat up" the money without the consumer getting proper service.

Then came the enormously convenient mobile phones, which Fiji consumers adopted with great alacrity as people have done all over the world, even the poorest, not just for communications purposes but also for social reasons.

The FBS household income and expenditure surveys have ample data to show the enormous amounts of money Fiji consumers (including children) have been spending on mobile phones and charge-ups, often quite irresponsibly.

Pure profit

One aspect that has never been publicised is the amount of "pure profit" mobile companies (Vodafone and Digicel) have made since their arrival, because consumers have prepaid for phone services and the mobile companies have gotten away by declaring any unused credit by a certain date, will be "cancelled" or "expire".

A thought: The consumer has given a certain amount of cash to the mobile company in order to make phone calls over time. If the amount of cash given is not used up fully, why one earth should the mobile company declare it will be "cancelled" ie the mobile company will just "take" your cash.

Consumers have had no choice in the matter. The Fijian Competition and Consumer Commission has never taken up this issue on behalf of consumers. You can conjecture why not.

Thousands of consumers have also experienced their credit often "disappears" without reason or without their reaching the person on the other side, or the charges are totally out of proportion to the time they spent actually talking. Few will bother going to the mobile company to demand a refund because the travel costs will often be more than the value of the credit lost.

Exactly the same processes are at work with eticketing for bus fares, which explains also why Vodafone has jumped on this very profitable bandwagon with great alacrity.

Mobile companies know

Mr Narube gave some estimates of how much free "credit" Vodafone will be receiving from consumers who buy the e-tickets. His estimates are too low.

He also gave some rough estimates of how much interest Vodafone will be "earning" on unused credit and Mr Narube used 1 per cent as a guideline. This is far too low.

More importantly, the public should ask how much would Vodafone be saving because it does not have to pay the market interest rate for loans from banks at commercial rates. I suspect it would be greater than 6 per cent.

Mr Narube estimated how much Vodafone will get when consumers fail to use their credit on the e-tickets in time and the credit "expires". Again, I suspect his estimates are far too low.

Opposition parties could demand this information through Parliament, though I doubt if they will ever get any answers.

I guarantee the IT boys in the mobile companies know exactly how much of consumers prepaid credit for mobile phones has been cancelled every year and how much is used up without the consumer getting their service.

There is also the unfortunate fact that many consumers, for whom regular transport to work and school is crucial, will buy extra credit to make sure they are not turned away from buses because their credit has expired.

The solutions

Mr Sayed-Khaiyum, who is driving this exercise asserts with some justification, that technological advances should be taken advantage of. He is right, but conveniently forgets the technological advances should not allow companies to "rip off" customers.

Dr Gounder and Mr Narube gave very sensible solutions the authorities and the bus companies could try (such as allowing e-tickets and cash), instead of the compulsory e-ticketing; and allow exact amounts of cash to be paid as bus fares into safe deposits on the bus so that drivers cannot steal.

I additionally suggest here that the strangely silent FCCC and the Reserve Bank of Fiji get together and put in a joint submission demanding that:

(a) Any credit bought for bus-fares through the etickets must not be allowed to "expire" by any particular date. That way, for consumers, the e-ticket will be "as good as cash" and they can store their ticket in their pockets, or under the mattress if they wish, for as long as they want and use it whenever;

(b) Given that technology is already able to do so, Vodafone should be required to pay the ticket owner interest at say 2 per cent per year (paid monthly), in exactly the same way banks pay interest on a monthly basis to savings and time deposit holders. That interest will still be less than what Vodafone is borrowing at; and

(c) Should Vodafone refuse to do this, then tender the service out to the banks who can not only all run the recharge machines just like they do their ATMs, they can also lend the funds out to their borrowers, and pay the ticket holder a reasonable interest on unused credit, just as they do on savings deposits.

* The views expressed are the author's and not of this newspaper.

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