Photo by ANGELA FRANKLIN on Unsplash
Photo by ANGELA FRANKLIN on Unsplash
  • On Thursday evening, president Cyril Ramaphosa mentioned in his State of Nation Address that mobile operators may be forced to make deep cuts to pre-paid data prices.
  • They will also have to give a free daily allocation of data, and free access to educational sites.
  • These proposals are currently under negotiation between the Competition Commission and large mobile operators like Vodacom and MTN.
  • For more stories, go to Business Insider South Africa.

In his State of the Nation Address on Thursday evening, president Cyril Ramaphosa said competition authorities are working on a resolution to force mobile operators to enact "deep cuts" to data prices across pre-paid monthly bundles as well as discounts for low-income households, a free daily allocation of data and free access to educational and other public interest websites.

Last year, the Competition Commission found that Vodacom and MTN were over-charging customers by as much as 30% to 50% as part of its Data Services Market Inquiry report. The commission is currently in negotiations with the large cellphone providers about  how prices should be lowered.

The report lists several measures for mobile operators to implement including cutting data prices for prepaid users and addressing ‘anti-poor’ price brackets

Among its recommendations the report found mobile operators must offer all prepaid subscribers a ‘lifeline package’ of daily free data. They must also give free access to content from public benefit organisations and educational institutions to ensure broad application. This means Wikipedia and other educational resource sites like Siyavula.com could be free to all South Africans, said Arthur Goldstuck, SA technology analyst and CEO of World Wide Worx.

Ramaphosa reiterated these recommendations in his speech, and is therefore stating the absolute obvious, says Goldstuck.

"He is not taking the conversation forward in any way…The result is there is no serious pressure on regulator ICASA to shake itself out of its slumber,” said Goldstuck.

“We are seeing an incredible uptake of smartphone users, but don’t see the same level of uptake of internet access. It’s because the people that are buying cheap smart phone devices cannot afford data to keep their phones up-to-date, let along use the internet."

An estimated third of South African smart phone owners can't afford the data to use the internet, or update their phones. 

He believes that Ramaphosa did recognise this in his speech. "in effect, (we) are condemning the poor to having great devices that can’t deliver because it uses a level of data that is not affordable.”

In its response to Ramaphosa's speech, a Vodacom spokesperson said delayed spectrum allocation has impacted the rate at which data prices could have fallen in South Africa.

Cellphone radio frequency spectrum is also used by other services such as GPS and television broadcasting. In South Africa, spectrum is limited because television broadcasting is still hogging frequencies – because a move from the analogue TV system to digital terrestrial television has been delayed for half a decade.

The president said on Thursday that spectrum regulator ICASA has undertaken to conclude the licensing of high demand spectrum for industry via auction before the end of 2020, after several years delay. Likewise because of additional requirements, the licensing of the wireless open-access network – or WOAN – is likely to completed during the course of 2021. 

The WOAN will be owned communally by a number of telecom groups and provide wholesale wireless data in South Africa.

According to Goldstuck, Government still has not come to the party with unveiling a deadline on its intention to auction off additional spectrum to operators

“In the middle of last year, the Minister of communications said that [spectrum] would be a priority and that government would fast track it and it...The same can be said for licencing of wireless open access network," said Goldstuck.

"Given that we have been having these discussions for years, this does not sound like government is making this a priority.”

Earlier this month, ICASA announced that there would be a one-month extension to their deadline, given that the engagements with the operators are at an advanced stage.

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