{"id":304140,"date":"2019-04-24T15:15:07","date_gmt":"2019-04-24T13:15:07","guid":{"rendered":"https:\/\/mybroadband.co.za\/news\/?p=304140"},"modified":"2019-04-24T15:16:16","modified_gmt":"2019-04-24T13:16:16","slug":"big-mobile-data-price-changes-and-new-network-rules-proposed","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/telecoms\/304140-big-mobile-data-price-changes-and-new-network-rules-proposed.html","title":{"rendered":"Big mobile data price changes and new network rules proposed"},"content":{"rendered":"

The Competition Commission has released a provisional report on its Data Services Market Inquiry, in which it prescribed new rules for mobile networks.<\/p>\n

The inquiry seeks to understand features in the market and the value chain that may cause high prices for data services, and makes recommendations based on this.<\/p>\n

In its preliminary findings, the commission said international benchmarking confirmed that South African data prices are high – particularly for mobile prepaid data.<\/p>\n

Notably, the commission found that South Africa’s data prices are higher than other BRICS and SADC countries.<\/p>\n

It also found that Vodacom and MTN charge higher prices in South Africa than other countries in which they operate.<\/p>\n

Anti-poor<\/h3>\n

The commission further stated that South Africa’s data pricing is “anti-poor” and lacks transparency.<\/p>\n

“An assessment of headline retail prices of all mobile operators demonstrates that consumers of small data bundles, generally being poorer customers, pay inexplicably more on a per MB\/GB basis.”<\/p>\n

“Relative to a 1GB bundle, a consumer buying a 100MB bundle will pay roughly twice the price on a per bundle basis for the same data period validity.”<\/p>\n

“A consumer buying a 50MB bundle will pay up to three times more and a 20MB bundle up to four times more”.<\/p>\n

Spectrum and new competitors<\/strong><\/h3>\n

The commission acknowledged, however, that a lack of spectrum played a role in high data prices.<\/p>\n

It said that while more spectrum may reduce operator costs, it won’t force companies to drop prices unless there are competitive pressures to do so.<\/p>\n

Despite the introduction of new competitors, the commission said that the dominance of Vodacom and MTN meant that the two companies could introduce prices independently and unconstrained by competitors.<\/p>\n

Recommendations<\/strong><\/h3>\n

The commission therefore made the following recommendations:<\/p>\n

    \n
  • These networks should introduce immediate relief on data pricing, including a commitment by mobile operators to reduce headline tariffs.<\/li>\n
  • Networks should reduce the price of sub-1GB bundles to within range of an “objectively justifiable and socially defensible range of the 1GB price”. Provisionally, this should be a maximum of 25% higher on a per MB basis.<\/li>\n
  • Networks should zero-rate public benefit and educational institution websites.<\/li>\n
  • Improving affordability and enhancing competition should be central to the assignment of spectrum.<\/li>\n
  • Existing regulations on facilities leasing must be extended to include ducts and poles and to impose cost-oriented pricing requirement on such facilities.<\/li>\n
  • There should be more regulatory scrutiny at the wholesale level to allow smaller networks to be more competitive.<\/li>\n
  • Alternative infrastructure must be developed, particularly to provide data services in lower income areas and smaller secondary cities and towns.<\/li>\n
  • The government should look to provide free public Wi-Fi and use their own infrastructure to reduce the costs of investment and both backhaul and last-mile infrastructure in lower-income areas.<\/li>\n<\/ul>\n

    Stakeholders have now been called to make submissions on this report by 14 June 2019.<\/p>\n

    Thereafter the inquiry team will assess these submissions before publishing a final report later this year.<\/p>\n

    Data Services Inquiry Summary<\/a> by BusinessTech<\/a> on Scribd<\/p>\n