Battle for lower data prices bearing fruit, says Icasa

The fight to lower the cost of mobile data in SA looks to be bearing fruit.

The Independent Communications Authority of SA (Icasa) reported last week that competition among mobile operators was helping consumers get more for their money.

Icasa, which was set up in 2000 to regulate the  telecommunications and broadcasting sectors, has come under pressure to do more to force mobile phone operators to cut prices, with relatively high prices for data seen as an impediment to the country’s ability to compete in a global economy that is increasingly being dominated by technological innovation.

Its investigation, which focused on the 163 tariff notifications lodged with Icasa during the period July 1 2018 to December 31 2018, also sought to ensure there was greater price transparency to enable consumers "to make informed choice, in terms of tariff plan preferences and/or preferred service providers based on their different offerings", Icasa said.

The DataMustFall campaign to get SA networks to lower their data prices in 2016 saw DJ and businessman Thabo Molefe, also known as Tbo Touch, and his business partner Gareth Cliff, take the argument all the way to parliament.

Icasa concluded that competition among mobile operators had been good for consumers during the period, with the emergence of new companies such as Rain — the data-only network founded by former FNB CEO Michael Jordaan and FirstRand founder Paul Harris.

Rain’s "One Plan Package" prepaid mobile data offering of R50 for a 1GB bundle was the most affordable.

Since the start of the year, MTN and Vodacom, the two biggest cellphone companies in the country, have reduced their out-of-bundle data rates, with the former cutting the  price by 50.5%. Vodacom implemented a 49c flat rate for all its plans per megabyte.

Tefo Mohapi, technology analyst and CEO of iAfrikan Digital, said prices were still not falling fast enough.

However, more change could be in store.

As of March, operators were compelled to allow customers across all networks to roll over their unused data, compared to the previous dispensation when it expired at a certain date.

The traditional players were saddled with old technology
and higher costs, which might have made them reluctant to
cut prices more aggressively, Mohapi said.

"MTN and Vodacom have legacy infrastructure and business units that they need to account for."

Mohapi said the country needed to deploy more public WiFi access zones using fibre networks as this was much cheaper than mobile data.

Customers can get unlimited data plans for using fibre for about R700 with the average price of data across mobile operators being R149 for a gigabyte. This may be a more viable way to drive data costs down for ordinary South Africans, rather than constantly battling with mobile operators.

gavazam@businesslive.co.za