Competition Commission In South Africa Says Data Is Too Expensive As Well

It seems like everyone is complaining about how expensive data is these days. The Competition Commission in South Africa has come out and said data is prohibitively expensive for South African subscribers in a recently published report.

The commission’s report found that by international standards mobile prepaid data in South Africa is too expensive. In fact, the report found that South African data is priced higher than in other SADC countries. A GB of data in SA costs over R100 (US$7) which is a bit baffling when you consider the country’s geography and population. Questions are also being raised regarding the fact that Vodacom and MTN charge less in other countries they operate than in South Africa.

The bundles in South Africa have been described as anti-poor and lacking in transparency. One of the statements from the report reads:

An assessment of headline retail prices of all mobile operators demonstrates that consumers of small data bundles, generally being poorer customers, pay inexplicably more on a per MB/GB basis.

Relative to a 1GB bundle, a consumer buying a 100MB bundle will pay roughly twice the price on a per bundle basis for the same data period validity.

A consumer buying a 50MB bundle will pay up to three times more and a 20MB bundle up to four times more

The issue of bundles has been contentious locally as well as some have quoted out of bundle pricing as the real cost of data but that’s not entirely fair to network operators since consumers are mostly buying the promotional bundles.

What can be done?

South Africa’s Competition Commission h as made the following suggestions:

• These networks should introduce immediate relief on data pricing – including a commitment by mobile operators to reduce headline tariffs;
• Networks should reduce the price of sub-1GB bundles to within range of an ‘objectively justifiable and socially defensible range of the 1GB price’.  Provisionally, this should be a maximum of 25% higher on a per MB basis;
• Networks should zero-rate public benefit and educational institution websites;
• Improving affordability and enhancing competition should be central to the assignment of spectrum;
• Existing regulations on facilities leasing must be extended to include ducts and poles and to impose cost-oriented pricing requirement on such facilities;
• There should be more regulatory scrutiny at the wholesale level to allow smaller networks to be more competitive;
• Alternative infrastructure must be developed, particularly to provide data services in lower income areas and smaller secondary cities and towns;
• The government should look to provide free public Wi-Fi and use their own infrastructure to reduce the costs of investment and both backhaul and last mile infrastructure in lower-income areas.

For a long time there has been a myth that data in South Africa is more affordable than in Zimbabwe which is not entirely true. You can consider it to be somewhat true if you’re speaking of the demographic within South Africa that has better buying power but that’s not entirely reflective of the reality faced by the entire country.

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