SA 4G to push up costs - expert

2012-10-23 07:29
The introduction of faster mobile networks in South Africa should include dramatic reductions in the cost of data, Tim Bishop has said. (picture provided)

The introduction of faster mobile networks in South Africa should include dramatic reductions in the cost of data, Tim Bishop has said. (picture provided)

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Cape Town - An industry expert has urged mobile operators to reduce the out of bundle cost of data as higher speed networks are likely to increase costs for consumers.

Both Vodacom and MTN have announced higher speed data networks, but have kept the cost of out of bundle data rates consistent.

"What the networks are doing - hats off to them - is trying to get things faster and get the latest technologies. But what they're doing is just getting a faster Ferrari for the very few that can afford it," Prezence Digital chief technology officer Tim Bishop told News24.

The speed of the networks is up to four times faster than the fastest 3G speed, though it is not fourth generation by the strict definition of the International Telecommunication Union (ITU).

"'4G': You've got to use that word carefully because what they've rolled out isn't strictly 4G. Strictly speaking, it's not [4G], it needs to be about 10 times faster than what it currently is to be 4G by the definition," Bishop said.

Data rates

Vodacom's high-speed offering is pegged at around 40mbps, but still some way short of the 100mbps as required by the ITU to be defined as 4G.

Bishop conceded that the network speed was much faster than what South Africans were used to and speculated that it was part of the country's journey to Long Term Evolution (LTE).

"LTE is sort of a journey up to 4G I guess, but let's face it - it's still damn fast right?"

Cost has emerged as a significant factor and with faster networks, mobile devices will likely consume data at higher rates than before.

A cursory News24 examination found that an Android device with the default settings in place consumed between 800MB and 1GB of data per month.

"I did a couple of calculations. I think I tweeted: 'Gone in 40 seconds, the new movie by Vodacom, regarding your 500MB iPhone 5 data plan,' because that's how long 500MB would take to disappear via LTE - 40 seconds," Bishop said.

This equates to users spending around R25 a second, and up to R90 000 per hour in out of bundle data costs if the consumption remains constant.

"All this speed is lovely, but the cost is what's killing it," Bishop added.

At its results meeting, Vodacom said that data demand was strong in SA and customers in the country grew to 29 million, an increase of 27%.

Revenue

"The demand remains strong; there's strong competition in the SA market. Data revenue is up 24% year-on-year. The active data customers [are] up 35%: Now just over 12 million [and] all of the 12 million are buying data bundles on a monthly basis," said outgoing CEO Pieter Uys.

Bishop said that as data made up a higher percentage of networks' revenue, they would continue to drive higher speed data

"Obviously the networks are focusing on the smart users because they're the big data consumers at the moment, but they're the data consumers at the moment because they can bloody well afford it," said Bishop.

He said that mobile operators should focus on lower end networks to get more people using data so that costs can be reduced.

"Really, how it should work is that is when things become faster and more ubiquitous, prices should correlate to that."


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