Data price reality check for South Africa

South Africa’s mobile and fixed-wireless data prices are unlikely to fall soon as network operators still need to invest significant sums in expanding their networks, Rain CEO Brandon Leigh told the Sunday Times.

Although the Independent Communications Authority of South Africa (Icasa) recently concluded an auction to release radio frequency spectrum — or cellular network capacity — Leigh said it would be a while before the industry realises price decreases.

He explained that operators would first have to invest time and billions of rands to deploy network infrastructure.

Leigh said the spectrum would eventually offer cost advantages, but prices would only decrease “over time”.

Icasa announced the spectrum auction winners in March 2022.

The industry regulator raised almost R14.5 billion for the national fiscus from the auction, with Vodacom and MTN bidding over R5 billion each.

Telkom and Rain forked out R2 billion and R1.4 billion, respectively, while Cell C and Liquid Telecom’s new spectrum purchases were the smallest.

From Rain’s perspective, Leigh said the new spectrum allocation would allow them to increase their coverage and become a national provider.

MyBroadband recently spoke to MTN and Vodacom regarding their expectations for 5G in South Africa following Icasa’s spectrum auction.

MTN didn’t expect the performance or quality of its network to change, while Vodacom believes that the new spectrum will help it increase 5G speeds and offer new pricing options.

“MTN acquired spectrum in the same frequency bands it has been using as part of the temporary spectrum assignments, namely in 2.6GHz and 3.5GHz bands,” said MTN corporate affairs executive Jacqui O’Sullivan.

Icasa had licensed spectrum on a temporary emergency basis at the start of the Covid-19 pandemic to help South Africa’s mobile networks cope with the influx in traffic due to work-from-home arrangements.

MTN has now acquired spectrum within these bands permanently, meaning it doesn’t have to switch off or migrate existing 5G customers out of the temporary network capacity it was assigned.

“5G speeds and latency will be the same as the current experience since we are deploying with the same frequency bands and same bandwidth as deployed with the temporary spectrum,” O’Sullivan said.

O’Sullivan said MTN aims to cover 25% of South Africa’s population with 5G by the end of 2022.

“Over time, we envisage that more spectrum will be re-farmed to 5G as the devices that support 5G on the network grow.”

Vodacom has a different perspective, as it told MyBroadband the spectrum it acquired would help it improve the throughputs of its 5G services.

“The additional spectrum acquired through the auction, specifically the contiguous 80 MHz in the 2600 MHz band, will allow Vodacom to deliver 5G services with even higher throughputs,” a spokesperson said.

“Vodacom has begun to upgrade its network to enable the use of this new spectrum. Once deployed, Vodacom 5G customers will experience even faster download speeds and will be exposed to new product and pricing options.”

Now read: Uncapped LTE and 5G price comparison in South Africa

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Data price reality check for South Africa