As the first quarter of 2014 draws to a close, SA's mobile landscape has continued to undergo incremental shifts, although not necessarily proportionate to the sweeping changes taking place both within and beyond the country's borders.
This is according to the latest Research ICT Africa (RIA) policy brief, "Shift from just-voice services: African markets gearing for Internet", and comes amid one of the biggest battles in SA's mobile history - the mobile termination rate (MTR) divide. The quarterly report examines prepaid mobile voice tariffs in 40 countries, with SA being a major focus.
While there is ongoing movement away from operators' traditional services - voice and SMS - prompting changes in mobile services and pricing strategies, prepaid prices in SA remain expensive, notes Alison Gillwald, executive director at Research ICT Africa.
According to RIA's first quarter pricing index, the cheapest basket price among SA's operators is still 4.4 times more expensive than the cheapest product in the rest of Africa at $4.90 (about R52), and 1.7 times more expensive than the cheapest product available from a dominant operator in Africa.
Gillwald notes that, although the cheapest South African operator's basket price continued to drop this past quarter (from $5.20, about R55 in the last quarter of 2013), the basket did not change in real value.
MTR aftermath
This despite the ever-declining wholesale interconnect fees operators pay each other to carry calls on each other's network. "After the enforcement of the amended MTR regulation, only MTN reduced its prepaid voice tariffs to 79c, which is higher than the cheapest tariff in the country, offered by Telkom Mobile at 29c on-net and 75c off-net."
Yesterday, Cell C introduced four new prepaid vouchers under its Supacharge portfolio, but this is only a three-month promotion and relates to bonus airtime that can be used for voice (on-net), SMS or data, and so it comes down to a bundled offering rather than voice tariff per se.
The Independent Communications Authority of SA (ICASA) has started to make strides in bringing the historically high communications costs in SA down. The cost reduction process was initiated in June last year when the regulator launchedits Cost to Communicate programme, putting in place concrete deadlines for some of the industry's most pressing issues.
As part of this, ICASA in January unveiled a new MTR regime that includes asymmetry in favour of Cell C and Telkom Mobile. Although a court application by SA's two dominant operators has resulted in a cloud of uncertainty as ICASA reviews the rates, these will still be in place for another five months and translate into wholesale savings for all four of SA's operators.
Up to now, however, only MTN - usually the last to cave - has reduced its prepaid tariffs. RIA says Vodacom and MTN's cheapest Organisation for Economic Cooperation and Development basket cost is R122 and has not changed since the first quarter of 2013.
Changing gauge
ICASA's GM of markets and competition, Pieter Grootes, said in June that the timely and effective execution of the Cost to Communicate programme hinges largely on licensees' compliance and integrity with regards to the information they are required to provide to the authority.
One of the issues Vodacom and MTN had with ICASA's new termination rate structure was that the regulator had not carried out the necessary study, or requested the relevant information from them, in order to arrive at the new rate of 44c chargeable to the two leading operators and 20c to Cell C and Telkom Mobile.
RIA notes that with individualised discounts, dynamic pricing and bundling being employed by operators as they adjust their pricing strategies to absorb some of the impact IP-based over-the-top services are having, ICASA will need to collect quarterly indicators of segmented average revenue per user and a monthly average minutes and data of use, in order to assess changes in the cost of communication.
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