EDITORIAL | Time to make good on long-promised goal of affordable digital access for all

The high cost of communication in South Africa is back in the spotlight, with the department of communications and digital technologies (DCDT) planning a fresh review of the country’s pricing framework.

Affordable voice and data services are no longer luxuries. They are essential tools for education, employment, banking, healthcare, government services and participation in modern society.

The DCDT’s latest initiative acknowledges what many consumers already know: despite years of reforms, the promise of affordable connectivity remains only partially fulfilled.

The Competition Commission’s 2019 Data Services Market Inquiry, Icasa’s subsequent regulations and the long-awaited release of high-demand spectrum in 2022 were all expected to usher in a new era of lower prices. While mobile data costs have declined and operators have generally avoided inflation-beating increases, South Africa still compares unfavourably with many African peers, especially for prepaid users.

The key question posed by the department is therefore the correct one. If spectrum allocation, increased competition and regulatory intervention have already taken place, why do communication costs remain stubbornly high?

Encouragingly, the proposed study appears willing to examine the issue more broadly than previous reviews. Rather than focusing solely on retail pricing, it intends assessing infrastructure costs, market concentration, taxation, spectrum policy, investment incentives, consumer behaviour, international benchmarks and the impact of previous regulatory interventions.

Public debate has often portrayed mobile operators as the sole culprits. While operators should be held accountable where competition is inadequate or pricing excessive, telecommunications pricing is influenced by an entire ecosystem.

Building and maintaining networks is capital intensive. Operators spend billions of rand on spectrum, towers, fibre networks, international connectivity, maintenance and backup power systems to keep services running during South Africa’s electricity challenges. Those costs ultimately find their way into consumer pricing.

World Wide Worx CEO Arthur Goldstuck is correct in arguing that any meaningful review must examine the entire value chain rather than simply demanding lower retail prices. Government cannot ignore the role that policy decisions, regulatory costs and administrative delays may play in keeping prices elevated.

The allocation of high-demand spectrum illustrates the challenge. Spectrum improves network efficiency by allowing operators to carry more traffic at lower unit costs. However, those benefits can be diluted when licences are auctioned at substantial cost. Operators must recover those investments while simultaneously expanding network coverage and meeting regulatory obligations. Every additional cost imposed on the sector eventually affects consumers.

This is why the DCDT’s proposed “Cost to Communicate Roadmap” could become an important policy document, provided it remains evidence-based rather than politically driven.

Competition has intensified, yet affordability challenges persist, particularly for lower-income prepaid users who often pay significantly more per gigabyte than contract subscribers.

There are useful lessons abroad. Several countries have successfully reduced connectivity costs through combinations of lower spectrum costs and infrastructure-sharing arrangements, among others.

The market itself has also changed significantly since the Competition Commission’s inquiry seven years ago. Mobile virtual network operators (MVNOs) have expanded rapidly, introducing new pricing models through banks, retailers and consumer brands such as FNB Connect, Capitec Connect, Standard Bank Connect, Mr Price Mobile and TFG Connect.

Competition has intensified, yet affordability challenges persist, particularly for lower-income prepaid users who often pay significantly more per gigabyte than contract subscribers.

With the next phase of reform, policymakers should resist simplistic calls for price controls that could undermine investment and network expansion. Instead, the focus should be on removing structural inefficiencies throughout the communications ecosystem while strengthening competition where necessary.

Affordable connectivity will not be achieved through regulation alone, nor by expecting operators to absorb every additional cost imposed on them. It requires coherent policymaking across spectrum management, taxation, infrastructure deployment, competition law and investment incentives.

The DCDT deserves credit for recognising that lowering communication costs requires more than another headline-grabbing intervention. The real test will come once the study is complete. South Africans have seen enough reports and recommendations.

What they need now is decisive action that finally delivers on the long-promised goal of affordable digital access for all.