MTN has responded to the findings of the Competition Commission’s Data Service Market Inquiry.
The report recommended that MTN and Vodacom reduce prepaid data prices by 30-50%, in addition to offering prepaid customers in South African free “lifeline” data.
MTN said that it would study the full report once received, but defended its limited ability to address high data costs.
Spectrum is a big issue
MTN highlighted the lack of spectrum as one of the main factors that drive high data costs in South Africa.
“For more than a decade, government and regulators have failed to release the spectrum that the mobile industry has so critically required to bring down the cost to communicate,” MTN said.
It explained how the company had invested billions to provide 4G with limited access to spectrum.
“To simply lay the blame for data costs at the foot of the operators is wrong. MTN in South Africa has had to compensate for the lack of spectrum by spending over R50 billion in the last five years to build a world-class network for all South Africans, covering over 95% of the population with 4G coverage, without any 4G spectrum having been allocated.”
To indicate the discrepancy in spectrum access, MTN compared the amount it has been allocated in South Africa to what it has received in Nigeria.
“Nigeria is often cited as an example of a developing country with lower data costs than South Africa. In South Africa, MTN has just 38MHz of spectrum. MTN Nigeria has almost triple that, with 110MHz,” MTN said.
In order to counter the limited spectrum availability and improve 3G and 4G coverage, MTN has had to refarm its 38Mhz of spectrum.
The operator said that this approach has huge cost implications.
“The spectrum crunch has resulted in MTN SA having to invest up to more than double per subscriber than what is seen, on average, with other fixed and mobile operators.”
“MTN provides services to more than half of the South African population and needs enough spectrum to cater for growing demand. MTN believes the majority of spectrum should be allocated to the existing operators that are in dire need of this spectrum capacity,” MTN stated.