Cost of mobile data highly exaggerated

DATA must fall – now there’s a cause we can all rally around! After all, South Africa has among the most expensive mobile data rates in the world, with the average citizen spending close to a quarter of their income on data, right?

Not so fast. Recent research has revealed some serious holes in the figures being bandied about to support the narrative that we’re all being royally ripped off for mobile data.

Take that alarming claim about most of us blowing almost 25% of our monthly salaries on data.

Now, I don’t like my data bill and I wish it were a lot lower, but I don’t have to be an accountant to know I don’t spend anything close to 10% of my income on data, let alone 25%.

But, I’m not the average citizen. While freelance journalism is hardly a money-spinner, I’m acutely aware that many millions of my fellow-citizens earn a lot less than I do. Perhaps they’re the ones blowing a quarter of their hardearned dosh on data.

Our Deputy Minister of Telecommunications and Postal Services, Hlengiwe Mkhize, certainly believes so.

Speaking to Talk Radio 702’s Xolani Gwala recently, Mkhize said decisive steps had to be taken by both government and the private sector to create incentives that promote affordable data.

“We have to be very concrete in looking at the percentage that people spend on data and then see whether it’s a problem or not. And clearly, everybody is fully aware that at the moment South Africans spend almost 25% of their monthly income on this,” Mkhize said.

Well, if someone in Mkhize’s position of authority says it, it must be true. Alas, a simple Google search reveals that she seems to have fallen for the same fallacy many of us did.

Independent fact-checking organisation Africa Check investigated this figure as long ago as last October in the early days of the #datamustfall campaign and found it to be wrong.

So where does it come from? It appears to be based on research conducted by Research ICT Africa.

But the study took into account money spent on both data and airtime. It is also at odds with two much larger nationally representative studies.

According to Africa Check, Statistics SA’S most recent Income and Expenditure Survey (for 2010/11) showed that expenditure on communication, including data and airtime, only accounted for 2.8% of households’ total expenditure.

Data from another nationally representative study, the National Income Dynamics Study, showed that households spent 3% of their income on cellphone use in 2014/15.

Africa Check did find that poorer households spend disproportionately more on mobile data, but still nowhere near the mythical 25%.

More recent research backs this up. The latest results from a long-term study conducted by UCT’S Southern Africa Labour and Development Research Unit found that the average household spent 3% of their income on cellphone use, including data costs.

South Africa’s national statistics agency latest Living Conditions Survey, released this year and providing data for 2014/2015, found that on average, 3.4% of annual household expenditure was dedicated to communication, or about R3 509.

The study found that households in urban informal areas dedicated the largest share of their expenditure to communication costs (an average 4.6% of income, or R1 797), while households in formal rural areas spent the least on communication at 3% (or R2 270).

Now R1 800 or R3 500 a year is still a lot to spend on connectivity, especially if your income is marginal, but it’s nothing like the scary figures being touted by the fallist movement.

What about the other claim that South Africans are paying among the highest rates in the world for data? That’s not entirely true either.

According to figures from EE Publishers, South African network operators offer a variety of data packages, with the price of a 1GB prepaid data bundle ranging from R99 to R160.

Compare that to the UK, where a 1GB bundle from the EE network will cost you £7.50 (R135) or France where it will set you back 10 euros (R155) from Orange.

An initial glance at comparative figures for Africa, however, seem to show we are indeed paying more than some of our continental counterparts.

For example, in Nigeria 2 000 naira (R92) will buy you 3.5GB of prepaid data on the MTN network, a much better deal on the face of it than our R99 to R160 for a mere 1GB.

That’s until you realise that 4G coverage in Nigeria is almost completely limited to the centre of three urban areas.

Also, relative prices have also been lowered by a massive Nigerian currency depreciation, with the naira having nearly halved in value relative to the rand since early 2016.

What about other developing countries?

A comparison with Airtel India shows that 1GB of data will cost 259 rupees (R55), but again 4G coverage is limited to the centre of large urban areas.

Nigerian and Indian network operators also have the benefit of high population densities.

Telecom towers are most efficiently grouped in areas with the most potential to reach people.

Sprawling populations, like those served by South African network operators, require more infrastructure to reach the same number of people, and that costs a lot of money to build and maintain.

Yes, mobile data prices are still too high, especially for lower-income earners who could potentially benefit the most from the liberating spin-offs of cheap connectivity.

But if we’re going to convince the networks to cut their rates, we need to do it armed with facts, not easily disproved fallacies. Follow me on Twitter @ alanqcooper