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ISPA wants wholesale data

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 26 Feb 2015
ISPA calls for a wholesale mobile data regime to boost competition in the sector.
ISPA calls for a wholesale mobile data regime to boost competition in the sector.

The Internet Service Providers' Association (ISPA) has issued a further call for local telcos to take "bold action" to bring down the costs of mobile broadband by introducing wholesale mobile data products.

ISPA argues the absence of a wholesale mobile data offering constitutes a lost business opportunity for mobile operators and an obstacle to deepening broadband penetration.

"In South Africa, mobile devices are the primary gateway to the business and social opportunities offered by the Internet," says ISPA chairman Graham Beneke. "High prices for mobile broadband will continue to act as a brake on Internet penetration in the country."

Beneke refers to when the BlackBerry uncapped mobile package was first launched. "It was instantly popular among SA mobile users, many of whom used the package as the only way they accessed the Web. There is clearly a demand for uncapped mobile data."

ISPA cites examples such as Axxess Mobile, which was among the first to offer an uncapped mobile data product to the market with innovations as three-month roll-over and no out-of-bundle rates. AfriHost is another example of an Internet service provider offering uncapped mobile data, it notes.

Research by World Wide Worx shows mobile data spend in South Africa grew 50% between 2010 and 2012, and that 52% of all Internet access is via cellphones only, says ISPA. It adds a subsequent, uncited, study showed, while smartphones continued to be adopted, consumers were increasingly turning to WiFi hotspots for connectivity - arguably in response to high data costs.

ISPA also cites World Bank research that established the correlation between broadband penetration and gross domestic product. It says every 10% increase in broadband penetration increases economic growth by 1.38%.

"This link between GDP growth and broadband penetration is one of the reasons the government set the target of 100% broadband coverage by 2020, and why ISPA supports that target," Beneke says. "And if the majority of people are going to be accessing the Internet through mobile devices, then the cost of mobile broadband is critical in achieving that target, and starting to provide economic opportunity for our country."

The association adds competition in the fixed-line broadband space has driven prices down, which it says strengthens its argument.

"Opening up the ADSL market to competition has created business opportunities for providers and the consumer has benefited hugely," Beneke says. "We believe that ICASA [Independent Communications Authority of SA] should take the necessary action to enable a simple resale model for mobile data to stimulate the same sort of consumer-friendly competition. It seems regulatory pressure is necessary to spur the introduction of the necessary wholesale product to create this new market."

Beneke urges consumers to begin demanding uncapped data offerings from service providers. "As voice and data converge on the Internet protocol platform, differentiated voice and data rates are becoming increasingly anomalous; we need to start moving towards one price for voice and data, and it has to begin with a genuine wholesale market in mobile data."

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