The South African mobile communication services market needs more regulation to encourage competition in order to instil a free and open environment, which will then lead to better and more affordable pricing.
This is according to Chris Daffy, Chief Commercial Officer at MobileData, a leading South African technology service provider focused on payment facilitation and prepaid electronic value distribution.
Daffy believes the call for a reduction in the price of mobile data is legitimate and has merit, particularly when one considers the plight of prepaid consumers.
“The price of mobile data is tantamount to extortion. South Africa has some of the highest data prices in the mobile arena in Africa and globally. The prepaid sector has the least disposable income, but is the most manipulated when charged,” said Daffy.
“Considering pre-paid users eliminate a large administrative burden and risk, surely they should benefit to some extent? No, not so! For service providers, what makes the South African market hard to compare is that there are so many rate plans across the networks and virtual networks, making true comparison difficult. This is on purpose methinks!,” he adds.
According to research undertaken by Fritz Milosevic and his team at dotAdvisors (www.dotadvisors.co.za) as of June 2017, on a rate plan the prepaid prices vary between R2.00 all the way to R0.04 per MB. The average price is R0.91 per MB over 27 offerings. Prepaid Data on packages vary between R0.90 to R0.01 per MB, the average price being R0.20 over 167 offerings.
A prepaid 100MB bundle varies between R0.49 to R0.10, the average being R0.23 over 18 offerings.
The situation is confusing Daffy says, and this only exacerbates an already frustrating situation.
He is convinced that some sort of regulation would go a long way to allow the entry of more competitors, and streamline licensing and regulation to help create a more free and open market.
And this is where the Competition Commission comes in.
“It seems, most disturbingly, the Competition Commission is required to be involved in most South African economic sectors. Most relevant is to stop the monopolistic practices that have resulted in South Africa being the second most expensive mobile data provider in Africa.
The implication of this is that data profitability is far more attractive than voice and its cost will decline … the only question is by how quickly.
“Technologies are advancing at breakneck speeds. The cost of this is also declining. 4G is data, it’s here and 5G is coming. Network capability is enhanced through wireless provision and this is relatively inexpensive. The decline in price will be offset by the exponential increase in consumption. We are consuming more and more data by the day,” Daffy continues.