Showdown looms on high cost of data in SA

THE INDEPENDENT Communications Authority of SA (Icasa) has questioned the high cost of data in South Africa, saying the prices were unjustifiable.

Icasa bosses told Parliament yesterday the inquiry into data costs would help reduce the price.

The telecommunications regulator was backed by MPs, who also said the high costs were unjustifiable and impacted negatively on the poor.

Icasa was in Parliament to brief the select committee on communications and public enterprises on the price of data.

Economic Development Minister Ebrahim Patel has set up an inquiry by the Competition Commission to probe the exorbitant costs. The ministers of communications, trade and industry and telecommunications and postal services had also expressed concern over the high cost of data.

They backed the inquiry by the competition authorities.

Icasa acting chairperson Rubben Mohlaloga said data prices must come down.

Mohlaloga said they supported consumers in calling for the reduction in the price.

South Africa’s data costs were high compared to its neighbouring countries.

“If you look at the international benchmarks, domestically there is this colloquial that data must fall,” said Mohlaloga.

And he said the prices must come down significantly.

However, he warned that when prices are reduced, the industry must be able to survive.

“It (data) must fall to the extent that the industry is sustainable. The cost must go down significantly,” he added.

Icasa acting chief executive Willington Ngwepe said the Competition Commission was already investigating if there was price collusion in the industry.

This followed a question by MPs whether there was collusion by the cellphone companies on the price of data.

Ngwepe said the investigation by the Competition Commission would be able to determine that.

He said this was stated by Minister of Telecommunications and Postal Services Siyabonga Cwele during his budget speech this year.

Patel also emphasised this point in his own budget speech.

“Parallel to that there is a process by Icasa on the review of broadband,” said Ngwepe.

Chairperson of the select committee Ellen Prins said they want to bring in the mobile operators to answer to this.

She said it was a sensitive matter and they wanted to hear all sides to the story.

“I think there is a need for us to meet with the service providers to give their side of the story (and) why we need (them) to reduce the cost of data,” said Prins.

Jacques Julius of the DA said the cost of data in South Africa was high compared to other countries.

Olifile Sefako of the ANC also questioned the high data costs, saying the poor were the biggest losers because of the cost.

He said the cost of data made it difficult for poor people to be active in the economy.

He called on consumer activists to join the committee when they meet with the mobile operators.

The issue of high data costs was first raised last year, which led to Parliament’s intervention.

Cabinet ministers also promised to act on the matter, which eventually led to the probe by the Competition Commission.

It is not clear how soon the commission will conclude its investigation, but Parliament said it wants to get to the bottom of the matter as a matter of urgency.

The committee said it would invite Cell C, Vodacom and MTN to come and explain themselves to MPs.