Notes to the Group financial statements | Note 30
for the year ended 31 December 2010 |
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December
2010
Rm |
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December
2009
Rm |
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| 30. |
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CONINGENT LIABILITIES/(ASSET) |
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Contingent liabilities* |
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941 |
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1 209 |
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* |
The Group’s present policy is to pay incentives to service providers (SP) for handset upgrades. These upgrades are only payable once the subscribers have completed a 21-month period with the SP since the initial commencement of their contract or previous upgrade and the eligible subscriber has exercised the right to receive an upgrade for a new postpaid contract with minimum terms. The value of the obligation may vary depending on the prevailing business rules at the time of the upgrade. The total number of eligible subscribers who had not yet exercised their right to upgrade at 31 December 2010 was 845 413 (December 2009: 782 753). The estimated contingent liability at 31 December 2010 based on the prevailing
business rules on such date amounts to R822 million (December 2009: R1 209 million).
The Group has however provided for those upgrades which have been made but not presented for payment. |
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