Regulations matter and they are very impactful. There was a time when if you have an Amazon or Walmart gift card, it would expire in your digital or physical purse. It was pure statistics: sell $1 million worth of gift cards, be assured that only 70% would be used before they expire. Yes, $300k on the right side of the balance sheet. So, with that, gift cards mushroomed in America with some brands offering even 60 day cards before they expire.
Then the hammer came from the U.S. Government: if these cards which people had paid with U.S. dollars expire and they are unable to use them, we require the “expired” money be sent to the US Treasury. Magically, within 24 hours, most of the cards removed expiration dates.
That takes me to the news that Nigeria will now rollover unused data for data subscribers: “Unused data by telecom subscribers must be rolled over in subsequent subscriptions, the Nigeria Communication Commission (NCC) has said”. Largely, we reason this way: I have paid for it and now it is my property, and should not necessarily expire.
Unused data by telecom subscribers must be rolled over in subsequent subscriptions, the Nigeria Communication Commission (NCC) has said.
This was disclosed in a statement signed by the agency’s spokesperson, Ikechukwu Adinde, on Thursday.
The statement said the agency reached the conclusion at the regular bi-annual meeting with senior executives of telecommunication companies on complaints management.
“In other words, a subscriber’s unused data must be rolled over to his/her subsequent data subscription. Therefore, the commission urges service providers to continue to inform and educate subscribers on the procedures and processes for data rollover,” it added.
This is a good move. But expect your data costs to go high as I have noted.
Yes, This is the business logic – by making data bundles expirable, it becomes cheaper for all, since most will never use the fully paid products before they expire! Airlines do the same; by making tickets nonrefundable, ticket prices drop since not many will use all sold tickets, freeing seats for last deal sales. The fact is this: if tickets are refundable, the prices rise!
Yes, airlines will book “seat commitments” on the tickets knowing that the seats could be lost before the planes take off. By raising the price, they cover losses from the cancellations. In other words, if there are ten sold tickets with probability that 2 may cancel, they would ensure that the eight remaining passengers will cover the costs for the ten seats.
But where ticket is nonrefundable, they can make the prices for the ten seats to be low knowing there are no surprises ahead since once a seat is purchased, the revenue is guaranteed.
My point is this: if you make data non-expirable, you will end up forcing telcos to increase the bundle price (or reduce the value at the current price). That may not be a better outcome.
Statistics…but NCC, the telecom regulator, is right here since this is not a monopoly market. Yes, the telcos do not have so much power to increase prices without losing customers. Good call.