Regulator Recommends Daily Free Data for South African Mobile Customers

The South African Competition Commission released its final report and recommendations of its Data Services Market Inquiry on 2 December. The Commission launched the Inquiry in 2017 as the result of public concerns over high data prices.

Key Findings
The Commission reported that a benchmarking exercise confirmed that South African data prices were too high, and that South Africa was performing poorly relative to other countries.

In addition, the Commission found data pricing to be “anti-poor” and lacking in transparency. Consumers who have less money and use a low volume of data were found to be charged higher per megabyte than wealthier, high volume customers. To benefit from lower costs, customers were buying shorter-validity data bundles, which left them without continuous mobile data at an affordable price, the report found.

Other concerns raised by the regulator were that competition in the mobile market was ineffective, with the country’s smaller MNOs unable to successfully challenge the larger incumbents. The situation with MVNOs was similar.

A lack of spectrum was found to contribute to increased costs. The Independent Communications Authority of South Africa (ICASA), has released an Information Memorandum for International Mobile Telecommunications Assignment which seeks submissions from stakeholders on its process and criteria for spectrum allocation. The Competition Commission report states that it has made submissions to ICASA on the matter, and will continue to engage with them.

Recommendations
The Competition Commission has recommended that the operators Vodacom and MTN work with them to reduce mobile data costs to consumers, stating there is scope for costs to be reduced by around 30% to 50%. The Commission is also requiring all operators to commit to giving prepaid customers a daily allowance of free data and a zero-rating approach to content from Public Benefit Organisations (nonprofits).

Additional recommendations from the Commission include further developing infrastructure in lower income areas, smaller cities and towns, to provide alternative data services to consumers through public WiFi and similar offerings. It calls for greater incentives to increase the rollout of Fibre To The Home (FTTH) in areas of low income, and on the government to actively promote free public WiFi. The Commission recommends that ICASA consider enabling regulatory changes to allow community network initiatives to utilise licensed, unused spectrum in rural areas.

Additional Reading

ICASA issued its Discussion Document on the Market Inquiry into mobile broadband services in South Africa on 29 November, giving interested parties 45 working days to submit their comments. The Inquiry is looking at pricing, network- and site-sharing, among other aspects relating to mobile data in the country. The Discussion Document draws upon research from the UK regulator Ofcom, the ITU and the Alliance For Affordable Internet (A4AI), among others.

Innovation and Investment is one of the IIC’s six key themes, and is a frequent topic of discussion at our events around the world. It is next on the agenda at our Telecommunications & Media Forum in Washington DC, 10-11 December 2019, with one of the topics in the session examining emerging technologies to address global connectivity, and innovative methods of inclusion.