Data dilemma

Are we paying too much?

DATA IS TOO EXPENSIVE – well, for me, at least. Sans Wi-fi, I consume just a little over 10 gigs of data a month, which ends up costing more than what I spend on food and transport combined.

And I’m not alone in this. You only have to gather around the water cooler, meet friends for coffee or spend time online to encounter someone with yet another complaint about how data is too expensive and which service provider is taking customers for a bigger, increasingly costly ride.

In simple terms, the more money you have, the better your access to basic information.

Understandably, there’s concern at the highest level among those tasked with managing the nation’s well-being; financial and otherwise. President Zuma even went so far as to warn during his most recent State of the Nation address that cutting the cost of data would be a national priority this year.

“We assure the youth that the lowering of the cost of data is uppermost in our plans,” Zuma told the nation in February. This was underlined in a subsequent media briefing addressed by the Minister of Telecommunications and Postal Services, Siyabonga Cwele. “It is only when you have competitive service providers that you will bring the cost of data down,” Cwele said.

According to the Minister, the Independent Communications Authority of South Africa is currently conducting a study on the price of data, with a focus on competition. “They are supposed to finalise a study this year, because we are also concerned about this relatively high cost of data.”

And the study isn’t merely about establishing pricing trends. It’s aimed at finding solutions to high prices, too: “We have asked them to come with specific recommendations on intervention,” Cwele said.

Government is clearly ready to take action. Judging by comparative research done on data prices across the world, it’s about time. Shedding some light on this, communications cost-effectiveness research organisation Tariffic has compared the prices that South Africans pay for “data only” packages compared with BRICS member countries Brazil, Russia, India and China. The study also compared South Africa’s data-only pricing with emerging African market Kenya and the First World, developed market of Australia. Prices were compared against the average data contract prices across all local mobile network operators. Tariffic said that, to ensure that it compared apples with apples, all figures were standardised against a “Cost of Living” index and took into account different tariff structures between various mobile operators.

The result is no great surprise: South Africa has the second-highest data contract prices in the group, second only to Brazil. Data prices for South Africa are on average 134 per cent more expensive than the cheapest prices in the group, it emerged.

Tariffic’s CEO, Antony Seeff, agrees with many consumers (myself included) that South Africa’s data prices are daylight robbery. “Data has become a necessity in South Africa and is used for education, social services and communication,” he says. “We have seen that data prices in South Africa are still more expensive than five of the other comparable countries in our study; we implore mobile network operators, ICASA and even government

to do whatever they can to ensure that data prices do fall.”

Alarmingly users, especially those who earn less, are spending significant portions of their income (around 20 per cent), on relatively small amounts of data (1 GB) according to research conducted by Research ICT Africa. Tariffic’s comments on this are scathing: “How can one be expected to pay for accommodation, transport, food and other living expenses when you’re forced to pay 20 per cent of your income on data?” In its view, data is becoming a human right and in today’s society access to the Internet is a necessity that should be easily and affordably accessible by any and all South Africans.

Adding some urgency is the steady march of technology. As ever more sophisticated communications protocols ramp up, data transmission speeds exponentially. Websites and apps are matching the pace and using significantly more data than they did a few years ago. But data prices haven’t come down to accommodate these changes. “Your 1 GB of data won’t get you as far as it would have a few years ago,” comments Tariffic’s Seeff. “And you would expect the prices to come down accordingly so that users will, at a minimum, continue getting the same value for the same price. However, data prices haven’t come down to nearly the same degree over the years.”

The bad news: whatever government decides and whatever the impact of technology and the economy, data prices won’t fall overnight.

There’s some practical advice, though, to those cellphone users who are spending too much on data. “The biggest pitfalls when it comes to data is to make sure you’re on the right data packages and/or bundles, and to ensure that you don’t go out of bundle,” says Seeff. He adds that Telkom and Cell C offer data packages that are substantially more affordable than those from MTN and Vodacom and that add-on data bundles can be bolted on to a contract at any time, saving you money from day one.

Dhanaraj Thakur, research manager at the Alliance for Affordable Internet (A4AI) agrees that unequal allocation of spectrum underlies much of SA’S data problems (see “All you can eat”) along with low levels of competition and a lack of infrastructure. Income inequality in South Africa means people with more money have access to more information, he adds.

The 2017 A4AI affordability report shows that slowing growth in Internet access and use is deepening the digital divide between the rich and the poor. A4AI is the world’s broadest technology sector coalition – comprising more than 80 member organisations from across the private, public and not-for-profit sectors in developing and developed nations – working to drive down the cost of Internet access in less developed countries through policy reform. Its report shows that governments in most developing countries are failing to take the action needed to provide affordable Internet access to their citizens. It found that only 19 developing countries have Internet that is affordable (i.e. 1 GB of mobile data is priced at 2 per cent or less of average monthly income) for the bulk of their populations.

But it is not all doom and gloom; there are steps that can be taken to alleviate our data problem. Thakur recommends better management of our universal service and access fund (these funds are designed to extend connectivity to those who cannot afford access or who live in areas without needed infrastructure); more public Wi-fi hotspots; lower taxes on data; and an improvement of infrastructure-sharing between companies. “Sharing infrastructure would result in lower costs for companies, which would result in lower prices for consumers.” PM