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ICASA to tackle 'crazy' out of bundle data prices

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ICASA says out-of-bundle and in-bundle price differentials are relatively high.
ICASA says out-of-bundle and in-bundle price differentials are relatively high.

The Independent Communications Authority of South Africa's (ICASA's) acting chairperson Rubben Mohlaloga said the regulator is looking at tackling "crazy" out-of-bundle mobile data rates.

He raised this issue when he briefed the Select Committee on Communications and Public Enterprises on Wednesday.

The out-of-bundle and in-bundle price differentials, Mohlaloga said, are relatively high, depending on the kind of bundle that consumers purchase.

"If you buy higher bundles, then you spend less per megabyte [MB]. If you buy a small bundle, say 100MB or 500MB, then you spend higher per MB. Once you are out of bundle, it is even worse - you move from an average of 5c to R2. That is an area of concern [for ICASA] and we think that it needs to be nipped in the bud."

He said an analysis of data costs since 2010 revealed a change in data costs since the advent of over-the-top services like WhatsApp and Skype and the penetration of smart devices. As a result, and also because of the call termination rate regime, voice tariffs have gone down.

Mohlaloga said with the penetration of smart devices currently standing at 40% and on the increase, out-of-bundle data tariffs are relatively high and this is the area of concern for ICASA.

His appearance in front of the committee comes amid complaints from the public about the cost to communicate in SA. The topic gained traction last year when South Africans took to social media to complain about high mobile data costs under the banner #DataMustFall.

This resulted in Parliament's portfolio committee on telecommunications and postal services spending two days hearing submissions from the communications department, ICASA, civil society organisations, telecoms operators and the public on the cost to communicate using mobile data.

ICASA has since embarked on implementing several interventions to ensure data prices fall. In July, it published a notice in a Government Gazette "of its intention to conduct an inquiry to determine the priority markets in the electronic communications sector". ICASA says it aims to finalise the inquiry on or before 31 March 2018.

Mohlaloga said ICASA has also established a task team following a memorandum of understanding with the National Consumer Commission, which looks at complaints from members of the public on issues that include the expiring and disappearing of data.

"The broadband market inquiry is intended to look at the effective competition and the reduction of data prices and the inquiry has started," he said.

High cost

Mohlaloga told the committee that when benchmarked with other countries, South Africans still pay higher prices to communicate. While Vodacom charged South Africans up to R270 for a 2GB data bundle, he claimed in Tanzania, consumers paid less than R100 for the same package.

He said, for example, when one looks at in-bundle rates per MB for prepaid packages, if a consumer buys 100MB of data from Vodacom, which is R29, they will spend 29c per MB. On the other hand, if a consumer buys 10GB of data, they will pay 6c per MB. Mohlaloga said the same applied to MTN, where if one buys 100MB of data, they are charged 35c per MB but the consumer would only be charged 6c per MB when they purchased 10GB of data.

"That is the point that I was making that the in-bundle differential where if you are in a higher bundle, you spend less per MB but if you buy a small bundle, you pay higher per MB. I think some internal logic needs to be unpacked there. That is an issue that also needs to be addressed," he said.

"The crazy one is the out-of-bundle rate per MB. [For] Vodacom, once you run out of your bundle, with them you are going to spend R2 per MB. From that 5 cents, you jump to R2. MTN, from 6c, you move to 99c. Cell C, from 25c, you move to R1.10. We think all of these differentials need to be killed.

"There is a need for a decrease in the average price per MB," he said.

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