Mobile price war benefits SA
2013-03-01 12:39
Cape Town – A price war seems to be developing between South African mobile operators that may benefit consumers.
Cell C announced last week that it was dropping the cost of its mobile data. That announcement was quickly followed by data package announcements from Vodacom and MTN.
Cell C announced on their website that a 500MB prepaid data bundle will cost consumers R75. The Smartdata bundles are available for contract, Top-up and Prepaid customers While Vodacom and MTN's 500MB data bundle is R79 and R119 respectively.
Cell C has an out of bundle rate of 15c per megabyte, while both Vodacom and MTN's out of bundle rate is R2.
Cell C also dropped the prices of their contracts. When buying a 500MB on contract consumers will pay a monthly fee of R45 excluding their connection fee.
Economic growth
Internet access in SA has relatively low penetration and according to a World Bank report, the mobile industry is linked to economic growth. The institution calculated that for every for every 10% increase in mobile penetration, there is a corresponding 0.8% increase in GDP.
"In South Africa especially, I think that what will wake up the government will be the economic realities - what they're facing in terms of jobs and the ability to create the kind of jobs that they want," Peter Lyons GSMA director for spectrum policy in Africa and the Middle East told News24.
In terms of higher speed internet access, the rollout of Long Term Evolution (LTE) has been frustrated by a lack of spectrum for the mobile operators.
In 2011, department of communications minister Roy Padayachie alluded to the complexities facing his department in the allocation of spectrum.
"Unfortunately in the South African landscape, this problem is overlaid with very complex issues of race and colour and the way that it dominates the landscape of the economy," said Padayachie.
Mobile have dealt with the lack of LTE spectrum by refarming and Vdacom has around 500 LE base stations out of around 10 000 in the country.
MTN said that it was focused on lobbying regulator Icasa (Independent Communications Authority of South Africa) to release additional spectrum.
"MTN has always maintained that the allocation of additional spectrum is critical to the rolling out of a LTE network enabling the provisioning of much needed mobile broadband access at significantly higher speeds," said Lambotharan Kanagaratnam, chief technology officer at MTN SA.
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