File picture: Boxer Ngwenya/Independent Media
File picture: Boxer Ngwenya/Independent Media

#DataMustFall: Costs to be probed after public outcry

By Lonwabo Marele, Ruth Ilott And Nickita Maesela Time of article published Jul 10, 2017

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Cape Town - Data cost in SA is among the highest in the world and therefore the Independent Communications Authority of South Africa (Icasa) is holding an inquiry as to why this is so.

The inquiry comes after a public outcry over excessive costs of mobile data, including the Twitter campaign, #DataMustFall.

Siya Qoza, spokesperson for Minister of Telecommunications and Postal Service Siyabonga Cwele, said the minister asked the Minister of Economic Development Ebrahim Patel, Icasa and the Competition Commission to do a thorough investigation and come up a solution to lower the cost of data.

Paseka Maleka spokesperson for Icasa said “the purpose of the investigation is to identify relevant wholesale and retail markets (which may include broadband markets) in the electronic communications sector that Icasa will prioritise for a future market review in terms of section 67 (4) of the Electronic Communications Act.”

Tariffic, a company that helps businesses manage and minimise their cellphone bills, claimed last year that “South Africa was consistently the second most expensive for 1GB, 2GB and 3GB data contracts, namely other BRICS-member countries (Brazil, Russia, India, China) as well Kenya and Australia- coming second only to Brazil”

Maleka said Icasa is commencing a process that is to be completed by March 2018. “This will include a market study, a discussion document, public hearings and a findings document. The next phase of the project is to have a series of market reviews.”

Telkom and Vodacom said they have already launched more cost-effective mechanisms that have benefited the reduction of data prices.

These include Telkom’s FreeMe packages and Vodacom’s Just4You deals.

Gugulethu Maqetuka executive: Group Communications and Business Support at Telkom said, “Telkom fully supports Icasa’s view. The initiatives we have taken and will take in future years are aimed at bringing about cost reductions for all, not only for Telkom customers.”

Londi Sibisi from Vodacom said the cost of delivering mobile services varies considerably between countries.

“There are a number of factors that contribute, such as taxes, geographic size and import duties. The more urban the area, the lower the cost, the more rural the area, the higher the cost.

“This links to the question of the social implications surrounding data prices that have yet to be resolved.”

Vinnie Santu spokesperson for Cell C said her company’s data prices are very competitive with data products as little as R6 per Gygabyte. 

“The single biggest input cost is equipment and the rollout infrastructure.

“In order for competition to really thrive and see competitive pricing passed on to the consumer, we need to see a proposed national broadband network implemented, or see mobile providers begin infrastructure sharing that will see input costs decline and competitive rates offered to consumers.”

Ruth Momberg spokesperson for MTN said in other countries where data and airtime is perceived to be lower, coverage is not necessarily on par with South Africa.

Global Technology analyst Arthur Goldstuck said the price of data has come down dynamically in South Africa, but only for those who can afford to buy data bundles in bulk.

“The poor pay the highest prices for data and the well-off pay the lowest.

“The real issue is not the data bundle cost, but the bundle rate people purchase. The higher the data bundle, the lower the price, and the lower the data bundle, the higher the price.”

Cape Argus

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