Mobile operators, govt must step up to reduce data prices, fast – competition watchdog

Mobile operators and government will each have to play their part in helping to address high data prices, the Competition Commission has said.

The commission on Wednesday released a provisional report on the data services market inquiry, which started in August 2017. The report includes preliminary findings and recommendations. Different stakeholders will have until June 14, 2019 to make further submissions.

The inquiry team will consider these submissions and continue to engage with stakeholders before releasing a final report later this year, commissioner Tembinkosi Bonakele said.

The inquiry found that data prices in SA were much higher than other African countries, and select countries worldwide. Further, data pricing structures are not transparent and poorer households are affected most by higher pricing.

Bonakele said the market was failing lower income and rural households.

Immediate relief needed

The recommendations include immediate relief on data pricing. The commission wants mobile operators to commit to reduce tariff levels and to enhance price transparency. The commission has also called for a "consistent industry-wide approach" to the zero-rating of content from public benefit organisations and educational institutions.

Failure by mobile operators to commit, should see the commission investigate excessive pricing as well as develop legislation and regulations to ensure these outcomes are achieved.

Another recommendation is for there to be an "urgent assignment" of high demand spectrum. "Improving affordability and enhancing competition must be central to the assignment of spectrum," Bonakele said. With greater spectrum access, data service providers must also then pass on cost reductions to consumers. This should go alongside obligations to improve affordable access to data, such as providing free public WiFi, the report read.

Competitive environment

Further to improve price-based competition, the commission has recommended more "regulatory scrutiny" and intervention at the wholesale level of the industry.

"National roaming arrangements with the smaller networks need to move towards more cost-orientated pricing levels to support the ability of the smaller networks to be more competitive," Bonakele said.

There needs to be greater collaboration between regulators to address wholesale regulation.

"More effective means of inter-regulator collaboration would strengthen regulatory oversight, enforcement and regulation in these markets."

The commission also recommended the development of alternative infrastructure, particularly to provide data to lower income areas and smaller secondary cities and towns.

"The commission recommends that local and national government, under the lead of the Department of Communications, actively support the development of free public Wi-Fi in low income areas," Bonakele said.

WiFi should be made available at commuter points like train stations and taxi ranks, and public spaces like parks, shopping areas and government service offices. Government should also do its bit to improve the investment case for private providers to roll out infrastructure.

Further, if government procures in the data services market, it should support smaller players and new entrants to improve the competition in the space, the commissioner added.

Brent Crude
All Share
Top 40
Financial 15
Industrial 25
Resource 10
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
I'm not really directly affected
18% - 1967 votes
I am taking a hit, but should be able to recover in the next year
23% - 2578 votes
My finances have been devastated
34% - 3826 votes
It's still too early to know what the full effect will be
25% - 2757 votes