SA’s data prices most expensive on continent

SOUTH Africa’s data prices are the most expensive on the continent, among the most costly in the world and almost half of the population still doesn’t have internet access, ITC research experts and activists told the Competition Commission during its data services market inquiry public hearings last week.

But cellphone network service providers such as Vodacom and MTN said they had worked hard to improve access to the internet through low-cost smartphones and creative data packages.

They said factors affecting data prices included the high cost of electricity, labour, fuel, millions of rand in losses to crime, the limited availability of spectrum and the weakened rand exchange rate to the dollar as most of their infrastructure equipment was priced in dollars.

Advocacy group Right2Know (R2K) highlighted the high cost of data by comparing it with the price of data in other BRICS countries.

“South Africa has one of the most expensive data prices in the world, even when adjusted for cost of living. To put this into perspective, India only charges R11 for 1GB, Nigeria charges R22, Ghana R71, Russia R24 and Vodacom in Tanzania charges R98 for 1GB but R149 in South Africa. South Africa has the second highest data contract prices compared with other BRICS-member countries, namely Brazil, China, India, Russia,” R2K said.

“South African data prices are 134% more expensive than the cheapest data prices in the group. Even at R99, Telkom has not managed to exert price pressure on MTN and Vodacom.

This cuts out almost half of South Africans, who are unable to afford the high price points.”

Onkokame Mothobi, a senior researcher with Research ICT Africa (RIA) told the commission that although data prices were higher than in other African countries, price sensitive consumers still opted to pay premium prices to obtain a quality network service.

“The cost of the cheapest 1GB in South Africa ($8.28 and R99) is eight times the cost of the cheapest 1GB in Egypt ($1.13). However, in a regulated data environment a number of other important factors are to be considered

when comparing prices such as coverage and coverage of services.

“The dominance of MTN and Vodacom in terms of subscriber market share and revenue share allows these two operators to re-invest in their infrastructure and offer higher quality than the two small operators,” RIA said in its submission.

According to RIA, about 53% of citizens have access to the internet.

Some innovative solutions proposed by Right2Know and Media Monitoring

Africa (MMA) was that community managed wi-fi zones should be created and that each citizen should be granted a free daily quota of data as a basic municipal service run as a public utility, similar to the free water and electricity quotas provided to households.

MMA said internet access should be legislated as a basic human right and recommended the setting up of free wi-fi zones in public spaces and government buildings, such as hospitals and schools.

Alliance for Affordable Internet, Africa regional co-ordinator, Onica Makwakwa, told the commission that 55% of the population lived in poverty and these people were most affected by the country’s high data costs.

“The poorest 20% of South Africans have to spend 19% of their monthly income for just 1GB of data and the top 20% of income earners spend less than 1% of their income for the same 1GB of data.”

She suggested that community coops be established to run wi-fi zones to provide low-cost internet connectivity in rural areas.

Former Durban IT expert, founder and managing director of HashtagSA. com, Conrad David, commenting on some of the issues that arose during the public hearings, said it was time for data prices to fall.

“Data is extremely expensive in South Africa and these telecoms providers have transferred from being voice-based companies to being data-based because they have seen the opportunity and are now capitalising on it.”

He said cyber centres had been opened in rural parts of the country but “the cost of data is making it very hard for us to educate a nation”.

“They (networks) need to look at alternative ways of generating revenue, instead of charging ridiculous data rates.”

David said data bundles should not expire and consumers should have the right to be able to use 1GB of data over a 12-month period.

“In order for us to progress in the Fourth Industrial Revolution, we are gong to need some assistance from these telecommunication companies in the form of bandwidth and accessibility.”

David added that a fair price for 1GB of data should be between R20 and R50.

The head of transformation at Dell, Natasha Reuben said quality internet connectivity and access to data was essential for the country’s development and education of the youth.

“Progression in terms of broadening access to high-quality Stem (science, technology, engineering and maths) curricula is fundamental to starting our children on the right path. We need to ensure a holistic development of the younger generation wherein they become makers of technology and innovation and not just consumers of it,” said Reuben.