Will mobile data prices finally fall?

The gravitas of the Competition Commission report opens a new front in the #DataMustFall battle.

Read time 3min 50sec

I'm still pinching myself. The preliminary report unveiled last week by the Competition Commission seems unreal. Finally, a state institution has codified the grievances around mobile data prices, which are so high they should be referred to as gouging.

Even after the 50% to 75% price slashing the major networks made on their data out of bundle rates, the new rates are still unbelievably high: between 40 and 200 times the cost of a gigabyte of ADSL data, even though they are sourced from the same tap.

Granted, there are additional infrastructure considerations, but do they justify such staggering differences in prices? Considering that we pay up to six times more than the other markets the large networks operate in, I believe the answer is no.

A fine cherry on top came when all the major networks could offer in their defence were the percentages of these new cuts. They really have no high ground left. But they haven't had for a long, long time.

High mobile data prices have been a serious issue in SA for many years and the major networks have been fighting any and every attempt to reduce those prices by any meaningful degree. Of late, a lack of spectrum has been blamed for these prices; indeed, one network already used that argument as the primary reason why mobile data prices are gouging consumers.

The reason mobile data prices are high is that the networks choose to keep them high.

But this is patently not true. The high prices existed long before the spectrum issue. The networks have a pattern of behaviour where they blame everything but themselves. Spectrum was just the latest. Let's not forget that for a long time the networks argued that prices weren't high at all, insisting comparisons with other markets were unfair (an argument presented regardless of which markets were used for the comparison, be it the UK or a SADC neighbour). If spectrum was a problem for 14 years, then why during that 14-year period did the networks assert data prices weren't as high or ridiculous as claimed?

The reason mobile data prices are high is that the networks choose to keep them high.

The commission's report finally puts this into the public arena in an official capacity. It's a crippling blow dealt to the networks, vindicating the tech media, NGOs such as Right2Know, Tbo Touch's #DataMustFall and many forgotten heroes.

Up to now, the major networks could just ignore the issue. They had the clout to just keep swaggering forth, proclaiming price 'slashes' that would not be out of tact for a Dickensian villain. You want a little more? We'll charge you a lot more.

How this plays out will be interesting. The report might be an election ploy, but it will be very hard to walk that back or even ignore its implications. Anger over data prices is too much for the topic to go quiet again. The major networks will no doubt deploy their fiscal and legal muscle, fighting change and slowing it down.

That concerns me the most: these companies have operated on a tactic of obfuscation and delays until we forget or give up. That customers aren't abandoning them shows this works. It is a big pity that Telkom Mobile and Cell C haven't been able to drive prices down further, and that is the fault of consumers not voting with their wallets.

But the gravitas of a Competition Commission report opens a new front in this battle. The free market alone is not capable of changing mobile data pricing in a meaningful way. By meaningful I would argue a gigabyte of data should never cost more than R40, and that should be out-of-bundle. But the market is completely skewed in favour of the big players. To change that, we need the state to intervene. This report opens that door.

Will data prices fall? I hope so. Must they fall? Only if we want any chance in the 21st century to grow as a nation. No pressure.

* James Francis is a freelance writer whose work has appeared in several local and international publications.

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