Page 199 - ITU-T Focus Group Digital Financial Services – Technology, innovation and competition

ITU-T Focus Group Digital Financial Services
Technology, Innovation and Competition

In January 2017, the Zimbabwe Telecommunications regulator, POTRAZ set floor prices on access to MNO
services. It had used a study of a bottom-up costing model to determine pricing. Implementation of the new
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pricing, however, led to market confusion and massive retail price increases in mobile data, USSD, SMS, and
voice call costs. This led to recriminations between POTARZ, the MNOs and consumers. Ultimately the retail
price increases were suspended by the MNOs a few days after initial implementation. 130

5.2.7 Quality of service in USSD sessions

5.2.7.1 Overview

Often USSD sessions drop, leading to a poor customer experience and maybe even loss of funds. This may
dissuade customers from using the DFS service again, instead opting to use an over the counter (OTC) provider
to do a transaction for them. The reasons for the dropped USSD session may be poor GSM signal, network
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congestion, or – as some TSPs and PSPs have alleged – deliberate throttling of their customer’s USSD sessions.
Such drops may reflect poorly on the TSPs and PSP’s service offering.

5.2.7.2 Competition aspects

Complaints from SPs allege that while MNOs may provide access, the QOS is poor, characterized by a high
proportion of dropped USSD sessions that abruptly end before the customer session is completed. As noted
above, technical issues relating to GSM networks and coverage may be the issue, although some SPs have
alleged that they are being handicapped through implementation of random throttling or prioritizing of
access. As a recent CGAP report noted, whether quality can be selectively degraded by the MNOs, and
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if they are doing so, is a factual issue that can be further explored by a regulator in markets where these
allegations arise. 133

5.2.7.3 Country examples

Uganda
Some TSPs and PSPs say that their customers experience QOS issues with USSD sessions, but the TSP/PSP
is unable to ‘fix’ the issue because some MNOs refuse to provide a QOS guarantee to them in their service
contracts. SPs have also alleged to the UCC that they may not have visibility of some failed USSD transactions.
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The length, duration, quality and wholesale charges of USSD sessions used in DFS are the subject of an ongoing
exploratory investigation by the UCC. 136

129 There are two approaches to estimating unit costs: top-down, bottom-up. These can be combined to form a ‘mixed approach’.
A bottom-up approach is used to estimate the costs of service usage and involves identifying all resources used to provide a
service, and then assigning a value to each of those resources. These values are summed and linked to a unit of activity to derive
a total unit cost. Top-down costing is more amenable to estimating the society level costs which are often intangible and where
data is scarce. See UK Cabinet Office (2017) Top Down And Bottom-Up Unit Cost Estimation, available at https:// goo. gl/ nZWX3M
130 Techzim (2017) New Tariffs - POTRAZ Says It Consulted The Mobile Operators, They Actually Wanted Even Higher Prices, available
at http:// bit. ly/ 2isSXNz
131 Mobile handsets & base stations must transmit enough power to maintain a call of acceptable quality or USSD session to com-
pletion without transmitting excessive power into the frequency channels & timeslots allocated to others. See Keysite (2014)
Understanding GSM/EDGE Transmitter and Receiver Measurements for Base Transceiver Stations and their Components, available
at https:// goo. gl/ n6kqnF
132 See Further Chen (2015) ibid); and CGAP (2014) ibid. The BB and the BTRC are planning to investigate QOS issues, part of a larger
study on USSD pricing. See also on USSD reporting for the BB, Business News (2015) ibid
133 CGAP (2014) ibid
134 In Uganda, service providers reported limited scope for negotiation of service level agreements with MNOs, that it was not possi-
ble to negotiate the level of service availability. Cartesian (2015) ibid
135 UCC (2016) ibid
136 ibid.

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