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Minister Patel calls for inquiry into data costs

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Minister Ebrahim Patel says he wants to promote a data-driven economy and address high data costs in SA. (Photo source: WEF)
Minister Ebrahim Patel says he wants to promote a data-driven economy and address high data costs in SA. (Photo source: WEF)

Minister of economic development, Ebrahim Patel, will ask the Competition Commission to launch an inquiry into the high cost of data in SA.

The minister made the statement during his department's budget vote speech last week, saying the growth of a data-driven economy is being constrained by high data costs, "which affect users of cellphones and laptops and businesses that require high volumes of data".

He quoted an article from The Economist, which describes data as the world's most valuable resource, being "to this century what oil was to the last one: a driver of growth and change".

Patel said following discussions with telecommunications and postal services minister, Siyabonga Cwele, he plans to request a market inquiry by the Competition Commission into the sector and will ask the commission to work with other regulators "to establish the facts, identify measures to reduce data costs and make recommendations to government".

Patel was not the only minister to mention the high cost of data and broadband during their budget vote speech with Cwele and communications minister Ayanda Dlodlo, both also making reference to the high cost to communicate in SA.

In his department's budget vote speech, Cwele said government agreed with a call from South Africans that data prices in the country should fall. This, after last year's #DataMustFall social media protests reached all the way to Parliament's portfolio committee on telecommunications and postal services.

Cwele last year also issued a policy directive to the Independent Communications Authority of SA (ICASA) "to prioritise the commencement and conclusion of an inquiry and the prescription of regulations to ensure effective competition in broadband markets".

"We are still awaiting concrete interventions from ICASA. The response from the regulator suggests they will finalise this work in the next two to three years," he said.

Cwele added the speed of intervention is critical in a rapidly evolving sector such as ICT.

"ICASA's State of ICT Report seems to suggest lack of competition, particularly by dominant players. The report indicates data traffic increased by 55%, data revenue increased from R30 billion to R38 billion, employment decreased by 4 000, yet prices remain sticky at the same level," he said in his speech.

Cwele agreed with Patel that the issue needs the attention of the Competition Commission and appealed to operators to "start competition in services to ensure the cost of data and calls fall to affordable levels or below 2% of average household income".

Dlodlo also spoke about the high cost to communicate in her speech, saying during the 2017/2018 financial year, ICASA will facilitate investment and access to broadband infrastructure for sustainable socioeconomic development.

"It will also promote competition and facilitate access to a broad range of communications services at an affordable cost," she said.

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