The true cost of mobile data

The true cost of delivering a MB of mobile data may be far lower than what some operators estimate

Rudolph Muller

October 3, 2012

The true cost of providing mobile data may be in the region of 3c to 5c per MB – far lower than previous estimates from operators which put the cost at around 10c per MB. This is according to Cell C CEO Alan Knott-Craig.

Knott-Craig told MyBroadband that while he is not certain what the exact cost of mobile data is, he would estimate the price at far lower than 10c per MB. He added that a fair guess would most likely place the cost at between 3c per MB and 5c per MB.

Knott-Craig said the fact that data can be throttled to contain costs means that it is possible to put a value on what it costs operators to deliver a MB of mobile data.

Vodacom has previously argued that the real cost of mobile data is around 10c per MB, making it unsustainable to drop retail prices to below 10c per MB.

However, Knott-Craig said that he does not buy Vodacom’s view that the cost of providing a MB of mobile data is somewhere between 10c per MB and 15c per MB.

The Cell C CEO explained that an optimized network, with the ability to make use of quiet times on the voice network to use for data traffic, can significantly lower the cost of providing mobile data services.

Cell C recently launched mobile data bundles which slashed the price of off-peak mobile data to below 2c per MB, an example of using quiet periods on a network to provide extra value to consumers.