Mobile telecommunications company Vodacom on March 10 signed an agreement with South Africa's Competition Commission to cut data costs by more than 30 percent from April 1. Photo: Competition Commission via Twitter
Mobile telecommunications company Vodacom on March 10 signed an agreement with South Africa's Competition Commission to cut data costs by more than 30 percent from April 1. Photo: Competition Commission via Twitter

ICASA, Communications Ministry, welcome latest move to facilitate data prices reduction

By Sizwe Dlamini Time of article published Mar 10, 2020

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CAPE TOWN – The Ministry of Communications & Digital Technologies and the Independent Communications Authority of South Africa (ICASA) on Tuesday welcomed the announcement and agreement reached between the Competition Commission and Vodacom in ensuring that the cost of data was reduced.

“This announcement comes at an opportune time as ICASA is currently undertaking two critical regulatory processes that have a bearing on the pricing of data services in the medium term i.e. the licensing of the International Mobile Telephony (IMT), also known as high demand spectrum as well as an inquiry into mobile broadband service markets,” the Ministry said in a statement.

Minister Stella Ndabeni-Abrahams said the announcement was an important milestone in the quest to ensure that data prices were affordable for the majority of South Africans as this was a key driver for the 4th Industrial Revolution.

“In July 2019, we issued the Policy on High Demand Spectrum which culminated in ICASA kick-starting the licensing process,” she said on Tuesday.

The Minister said one of the expected consequences of the undertaking to reduce data prices as per the terms of the settlement reached is that it will stimulate demand by consumers. As a result, a lot more people will find it easier to communicate using the service while others will increase their usage and demand for data for personal or business use.

This, therefore, means that network operators will need more capacity and/or spectrum to meet the demand and to facilitate the consumption of the free offerings and/or zero-rated data services. 

ICASA said it would ensure that it met the timelines it had committed to in ensuring the completion of the spectrum licensing following submissions to the Information Memorandum – the process that paved the way towards this licensing process.

The regulatory body said the spectrum auction would take place by no later than the end of 2020 as announced by President Cyril Ramaphosa during the State of the Nation Address (SONA). However, the licensing of the Wireless Open Access Network (WOAN) would be concluded in 2021.

ICASA acting chairperson, Dr Keabetswe Modimoeng said: “It is our concerted view as a regulator that the licensing of high demand spectrum is one of the critical components that will facilitate deployment of digital infrastructure as well as building an inclusive digital society, with the goal of ensuring that all South Africans participate meaningfully in the opportunities emanating from the Fourth Industrial Revolution.”

With regards to the Mobile Broadband Services Market, the settlement facilitated by the Commission is aimed at providing immediate relief to consumers in respect of the retail prices to ensure consumers pay the rates that are affordable. 

“However, the discussion document issued by ICASA notes that there are structural problems in the wholesale layer of the data services market. ICASA would therefore like to specifically address that layer and intervene as it has a regulatory mandate to protect consumers against unfair business practice and ineffective competition in this regard.

“This process will address challenges at the wholesale layer specifically as it relates to, among others, national roaming, site access and competition matters including barriers to entry, etc. These measures are in line with the policy prescripts to promote effective competition and to facilitate entry by new players in the market whilst also advancing the transformation agenda within the Information and Communications Technology (ICT) sector, while stimulating economic growth,” reads the statement.

The Draft Regulations on Mobile Broadband Services Market will be released by July 2020 for public consultation and completed by the end of the financial year.

BUSINESS REPORT

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