The Competition Commission recently released its Data Services Market Inquiry report, which aimed to establish why mobile data prices are high in South Africa and what can be done about it.
The commission’s report states that international benchmarking confirmed South African data prices are high – particularly for mobile prepaid data.
It also found that Vodacom and MTN charge higher prices in South Africa than other countries in which they operate.
The Competition Commission recommended that operators should introduce immediate relief on data pricing.
Criticism of the report
The report has been criticized for containing outdated pricing information and for conclusions which are half-baked and populist.
According to mobile operators and some commentators, the report does not take network quality and network investment into account in its pricing comparison.
They added that the effective price of data continues to decrease every year, which show that their pricing transformation strategies are working.
While spectrum is mentioned in the report as a possible enabler of lower prices, there is no link between spectrum availability and pricing between countries.
James Hodge, economist of the Competition Commission, admitted that the pricing arguments in the report currently hold only limited merit because of the outdated information.
He did, however, add that the difference in per-MB pricing between small and large bundles persists and that inter-country pricing differences remain significant.
Here is the latest data
It can be challenging to do an up-to-date analysis of mobile data prices, spectrum, network coverage, and network investment.
The fair mobile data pricing comparison is also complicated because there are not always overlapping data bundle sizes between countries.
To help the Competition Commission and other organisations with their investigations into mobile data prices, MyBroadband did this work for them.
Here is a breakdown of mobile data prices in prominent countries where Vodacom and MTN operate, the spectrum available to operators in those countries, and their network quality.
Mobile data prices
Here are mobile data pricing comparisons for 30-day data bundles for Vodacom and MTN’s operations in African countries.
To overcome the problem of data bundle size differences in different countries, we took the average per-GB price of data bundles between 1GB and 3GB, and again for bundles of around 10GB.
Conclusion: Prepaid mobile data prices are significantly higher in South Africa than in other countries where Vodacom and MTN operate.
|MTN 30-Day Data Bundle Prices|
|Country||1GB||1.5GB||2GB||2.5GB||3GB||Price per GB (1GB – 3GB)|
|Country||7GB||10GB||12GB||13GB||–||Price per GB (10GB or closest)|
|Vodacom 30-Day Data Bundle Prices|
|Country||1GB||2GB||2.5GB||3GB||Price per GB (1GB – 3GB)|
|Country||7GB||10GB||15GB||–||Price per GB (10GB or closest)|
MyBroadband looked at MTN and Vodacom’s network investments in South Africa compared to other countries.
This is important in any pricing comparison as it indicates what the input cost is to produce the service – in this case a quality network.
Conclusion: MTN and Vodacom invest much more in their network in South Africa than in other countries. This cost is passed on to consumers and local data prices can therefore be expected to be higher than in countries with a lower Capex per subscriber.
|MTN Network Investment per Subscriber|
|Country||Capex||Subscribers||Capex per subscriber|
|Vodacom Network Investment per Subscriber|
|Country||Capex||Subscribers||Capex per subscriber|
The table below shows that Vodacom’s network quality and coverage in South Africa are significantly better than in other countries where it operates.
Conclusion: The network quality and coverage is in line with Capex per subscriber and should be considered in a mobile data pricing comparison.
|Vodacom Network Coverage and Quality|
|Country||Total Coverage||3G Coverage||4G Coverage||Data Speed|
|South Africa||100%||99%||80%||31Mbps (4G)|
When you look at the spectrum assignment in South Africa and other African countries, it is easy to see why MTN and Vodacom are pleading for more.
MTN South Africa, for example, has 38MHz of cellular spectrum. This is nearly half the amount of spectrum the company has in Nigeria and the Ivory Coast.
Vodacom’s situation is similar – it has 38MHz in South Africa and 173MHz in Lesotho.
The tables below show a breakdown of the spectrum allocation in various countries where MTN and Vodacom operate.
It should be noted that these spectrum breakdowns show mainstream IMT bands, whereas certain operations may have additional spectrum assigned for legacy technologies such as WiMAX.
Conclusion: Vodacom and MTN have significantly less spectrum in South Africa than in other countries where they operate. This influences data prices negatively and government should hand out spectrum urgently to resolve this problem.
|MTN Spectrum per Country|
|Spectrum Band||South Africa||Uganda||Ghana||Nigeria||Ivory Coast|
|800MHz||–||5MHz (4G)||10MHz (4G)||–||10MHz (4G)|
|900MHz||11MHz (2G, 3G and 4G)||8.2MHz (2G and 3G)||8MHz (2G and 3G)||5MHz (2G and 3G)||10MHz (2G and 3G)|
|1,800MHz||12MHz (2G and 4G)||15MHz (2G)||10MHz (2G)||15MHz (2G)||15MHz (2G)|
|2,100MHz||15MHz (3G and 4G)||15MHz (3G)||15MHz (3G)||10MHz (3G)||15MHz (3G)|
|2,600MHz||–||10MHz (4G)||20MHz (4G)||30MHz (4G)||20MHz (4G)|
|Dedicated newly issued spectrum for 4G||–||15MHz||30MHz||40MHz||30MHz|
|Vodacom Spectrum per Country|
|Spectrum Band||South Africa||Mozambique||Kenya||DRC||Lesotho|
What this data tells us
The data shows that Vodacom and MTN’s mobile data prices are more expensive than other countries where they operate.
The data further shows that there are good reasons for the higher prices, which include bigger network investments, better networks, and less spectrum than in other countries.
If the Competition Commission really wants to investigate how data prices can be reduced further, here are a few suggestions.
- Find relevant peer group countries which have similar characteristics as South Africa in terms of population, demographics, and geography.
- Use 2019 data for mobile data prices in the countries which you selected to ensure you get an accurate view of current trends.
- Look at data prices in relation to investment per subscriber and network coverage & performance to ensure that you compare networks of similar quality.
- Look at the effective price of data for mobile data for all mobile operators in South Africa and determine the current trend.
If you find that South Africa’s mobile data prices across all operators are too high, find out what countries similar to South Africa did to drive down mobile data prices.
There is no reason to re-invent the wheel. See what worked internationally and implement those measures.
A shortcut to all of this is to just give mobile operators more spectrum, make it easier to roll out networks, and ensure there is enough competition in the local market (which is already the case).
Mobile Operator Data Sheet
For those who did not want to read through the whole article, we prepared a simple data sheet which is easy to use.