Vodacom wants access to research on data costs in other African countries

15 September 2018 - 17:46 By Graeme Hosken
Vodacom Headquarters. File photo.
Vodacom Headquarters. File photo.
Image: Gallo Images / Alet Pretorius

Telecommunications giant Vodacom has demanded access to the Competition Commission's "current market research" into data in other African countries being cheaper than in South Africa.

The commission and the Independent Communications Authority of South Africa (Icasa) are investigating the price of data with the aim to bring costs down and make it more affordable for the poor.

The demand is among hundreds of submissions to the commission‚ some of which TimesLIVE has seen. The majority raise concerns about how the poor have to pay more for data than the rich.

Vodacom claims in its submission that research done for it concluded that benchmarking of data prices [to other countries] was complex and that significant variations in key economic and geographic factors across countries made it difficult to draw conclusions from cross-country comparisons of prices.

"South Africa offers one of the best ‘value for money’ in relation to mobile data services."

The commission will announce this week that public hearings into data prices will begin in October and that it has been granted an eight-month deadline extension so it can successfully conclude its inquiry.

The commission's inquiry‚ announced in August last year‚ was meant to have been wrapped up two weeks ago. It will now wrap up on March 31 next year.

Andreas le Roux of the DG Murray Trust‚ a grant-making foundation‚ has argued for zero-rating mobile data costs associated with accessing information‚ as well as apps and tools provided by public benefit organisations‚ to help benefit the 30-million South Africans living in poverty‚ "who according to Stats SA survive on R992 a month".

"Currently 55% of South Africans would have to spend 15% of their income to buy a very modest 1GB of mobile data. The actual cost is much higher. More than one mobile network provider has‚ in recent months‚ aggressively marketed a 30MB bundle for R12‚ a price point that those living in poverty could possibly afford.

"Yet‚ this equates to R400 per gigabyte of data or over 40% of the monthly income of 30 million South Africans."

He said it appeared mobile networks were taking advantage of poorer South Africans by charging them disproportionately high rates‚ with wealthier individuals qualifying for post-paid contracts paying approximately half the cost of 1GB prepaid mobile data.

Koketso Moeti and Paul Mason of Amandla.Mobi in their submission said "out-of-bundle" data prices were 10 times higher.

"There is significant competition at the top of the market with promotional offers that offer higher income contract consumers data at 0.03c or less. This means that those consumers who are using small data bundles or using data ‘out of bundle’ may be paying 50 times what richer consumers are paying.

"Low income consumers purchase goods in much smaller quantities and pay a higher price per unit. Why should the poor pay more for data than the rich?"

Commission spokesman Sipho Ngwema said the commission had engaged with Icasa about extending the deadline.

"We are confident we will meet the deadline. The extension was requested because of the amount of work that still needs to be done‚ including public hearings which will happen over two days in October.

"The work we still need to do relates to further investigations and interviews with different stakeholders‚ who include everyone affected by data costs."

"We need the time to do a thorough job. While we have an adequate team for the task‚ the commission has been hit hard by a lack of resources. We are extremely under-resourced which affects our deadlines. The commission is interacting with our different stakeholders to get more resources to address our case backlog."

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