Why mobile data prices aren’t coming down faster

If the government released spectrum to mobile operators, the price of mobile data would come down faster.

This is according to MTN SA CEO Godfrey Motsa, who told delegates at the 2017 MyBroadband Conference that data prices must decrease.

He said data price cuts could be significant if operators had access to more spectrum – the capacity wireless networks need to connect mobile devices to towers.

Unfortunately, it is not possible to assign operators any available frequencies to use for their mobile networks, as devices are designed to work within certain bands.

There is suitable spectrum trapped in the 800MHz band, waiting for South Africa’s migration to digital TV to be completed – which has dragged on for years.

Spectrum in the 2,600MHz band is also suitable for mobile networks and it has been lying dormant for years.

The government appears to have decided to delay the allocation of 2,600MHz spectrum until the digital TV migration is completed, and it will be assigned along with the 800MHz band.

With this spectrum, Motsa said MTN could cut the price of a 1GB prepaid data bundle to R50 and cut its out-of-bundle rate to 29c per megabyte.

“Spectrum is oxygen for networks. Spectrum reduces prices,” said Motsa.

He argued that South African operators are among the most spectrum-starved in the world, illustrating his point with the graph below.

Spectrum

Network capacity

Without spectrum, mobile networks have been forced to build more towers rather than add capacity to existing sites – a process they call densification.

To illustrate the investment required to expand their network to meet demand, Motsa showed how MTN’s capital expenditure has grown in recent years.

“These numbers are so sky high because we don’t have spectrum,” said Motsa.

He warned that it is not sustainable to keep investing such large sums of money into infrastructure.

“We can’t keep on pumping this amount of money, this increases prices for the poor.”

Spectrum

Network

Now read: Cellphone network quality will suffer in South Africa without more spectrum

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Why mobile data prices aren’t coming down faster