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Amid looming protest, telcos insist they’ve reduced data costs

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 16 May 2024
According to a recent report by Cable.co.uk, the average cost of a gigabyte of mobile data in SA is $1.81 (R34.69).
According to a recent report by Cable.co.uk, the average cost of a gigabyte of mobile data in SA is $1.81 (R34.69).

South African mobile operators contend they have made great strides in reducing the costs of mobile data since the last spectrum auction held by the Independent Communications Authority of South Africa (ICASA).

However, they note inflation, load-shedding as well as vandalism and theft of infrastructure are putting a strain on their resources, inhibiting further reductions in the cost to communicate.

The telcos were responding to an imminent protest by civic organisation Friends of a Free Internet, which plans to picket at the communication regulator’s head office in Centurion tomorrow, over high mobile data costs in the country.

Friends of a Free Internet is protesting to demand government end “profiteering” by MTN, Vodacom, Cell C and Telkom, and ensure the telcos “keep their promise to expand affordable internet access to everyone in South Africa”.

The protest will take place on World Telecommunication and Information Society Day.

“The digital divide is amplifying and deepening SA’s inequality, as a few enjoy high-speed world-class fibre internet connections, while the marginalised majority are either excluded from network access completely, or remain condemned to the ghetto of slow and over-priced prepaid mobile connections,” says the organisation.

“It’s over two years since government gave R14.4 billion worth of our national airwaves to the cellphone companies. They committed to extend network coverage to 97% of the population, connecting over 32 000 public buildings (like schools and clinics) to high-speed broadband, and making all the mobile content on non-profit and government websites free to visit.”

According to Friends of a Free Internet, no progress has been reported. “The ‘Stop Thief Campaign’ will not allow the commitments made in 2022 to become just more broken promises. We are tired of broken promises from politicians, empty assurances from ICASA, ongoing price gouging of the mobile companies. Without public engagement, we can expect more of the same.”

According to a recent report by Cable.co.uk, the average cost of a gigabyte (GB) of mobile data in South Africa is $1.81 (R34.69), with the country ranking number 149 out of 237 countries in terms of the cheapest mobile data.

Cable analysed 46 mobile data plans in SA and found the cheapest price of 1GB of data in the country is $0.10 (R2.88), while the most expensive is $9.90 (R186).

Multiple considerations

ITWeb asked Vodacom, MTN, Telkom, Cell C and ICASA about the measures they have taken to reduce data costs. ICASA had not responded by the time of publication.

“It is important to note that the cost of telecommunications services is influenced by a variety input costs and frequency is only one element of many inputs that impact the cost to communicate,” says MTN SA.

MTN says it remains committed to improving data affordability for South Africans, by providing cost-effective data products and services, as well as zero-rating public-benefit websites to enable users to access free data services.

The telco notes it has been lowering the cost of data for several years, even prior to the allocation of spectrum. “For example, over the two years from 2021 to 2022, MTN reduced its data tariff by 33%.”

The modernisation of its network is a key enabler to better connectivity and data affordability, it adds. “To that end, MTN will continue to modernise its network to ensure every South African can get seamless connectivity, which ultimately enables them to engage in commercial and social activity, attend online school and work everywhere they are.

“We also remain cognisant of and need to appropriately manage the adverse inflationary environment within which we operate. The impact of load-shedding and an increase in battery theft and vandalism are all challenges the industry continues to face and which adversely impact the cost to communicate.”

‘Unavoidable increases’

Vodacom notes that in line with its pricing transformation strategy, the cost of data has fallen significantly in recent years. It says this is evidenced by the decline in the headline data price (1GB monthly bundle) from R149 to R85 in two years, a drop of 43%, while effective prepaid tariffs have dropped more significantly since 2019.

According to Vodacom, this was supported by the introduction in 2022 of prepaid LTE mobile broadband connectivity, which has accelerated the telco’s pricing transformation and was largely made possible by the spectrum it acquired in 2022 for R5.38 billion.

“Given the heightened global inflationary pressures in recent years, cost increases have become unavoidable across most industries,” a Vodacom spokesperson comments.

“In South Africa, we have made significant investments to ensure network resilience through sustained periods of load-shedding, in addition to rising costs associated with base station vandalism and battery theft.”

Vodacom reveals that in the past year, it invested R11.1 billion in its infrastructure in SA. It adds that its ConnectU zero-rated platform gives Vodacom customers free access to essential services on the internet.

Telkom states its focus has always been on expanding access to electronic communications services and developing ICT infrastructure. “We are constantly driven to providing affordable and inclusive digital connectivity, thus enabling a better life for our customers.”

Darius Badenhorst, Cell C chief growth officer, points to the company’s mobile virtual network operator (MVNO) strategy as one of the ways it has reduced the cost of data.

He adds that the expansion of the MVNO industry led to product innovations and introductions that had a positive impact for South African consumers by providing more choice, accessibility and affordability.

“Cell C has played a critical role in the enablement of competition in the telco landscape.” 

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