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South Africa’s mobile data cost domino effect

South Africa’s mobile data costs are ranked among the highest in the world and it can be argued that a lack of connectivity also contributes to the nation’s slow economic growth. Access to fast and reliable connectivity can lead to the growth of small business, leapfrog the country quicker into the Fourth Industrial Revolution and give rise to other sectors that require connectivity to thrive.

Statistics show that there are still 3.8 billion people without fast and reliable internet access across the globe.

Facebook’s Head of Global Connectivity Policy and Planning, Robert Pepper, says connectivity lets people talk with friends and family, learn new things, start new businesses and find employment. Statistics show that there are still 3.8 billion people without fast and reliable internet access across the globe. Pepper wrote these thoughts following the release of The Inclusive Internet Index 2019, by Facebook.

The report sees Sweden in the lead based on various metrics such as; Availability, Affordability, Relevance and Readiness. South Africa ranks poorly among its peers showing up in 50th place tied with Kazakhstan. According to the report, South Africa is in the lead across Africa and in fourth place in the readiness category, which is thanks to the country’s progressive ICT policy.

Smartphones

Smart devices

The Data Must Fall Movement

In September 2016 South Africa’s high mobile data prices shot to the limelight when the #DataMustFall hashtag spread on social media, led by media personality Thabiso “Tbo Touch” Molefe.

It’s going to take ordinary ppl like you and I to achieve the success of this campaign! All networks you have 29 days left #datamustfall

The #DataMustFall movement called on South African telecoms giants Vodacom, MTN, Cell C and Telkom to consider lowering telecommunications and data costs. Academics, politicians, corporate, civil society and regulators entered the fray to and persuade the industry to lower its prices.

Three years later, South Africans are still looking forward to cheaper data costs. Parliament, ICASA and The Competition Commission have all weighed in on the costs of data and telecommunication resulting in various inquiries, recommendations and changes to help make communication more accessible through inclusive pricing strategies.

Changing the telecommunications landscape

The South African telecommunications landscape saw a monumental shift when ICASA first ruled against data expiry, which was to take effect on 1 March 2019. This regulation ensures that mobile network operators allow their customers to roll over unused mobile data when their bundles are said to have expired.

South African mobile operators have seen increased pressure to lower prices on their data packages following an explosive report by the Competition Commission which revealed that two of the biggest mobile operators overcharged their clients. MyBroadbrand reported that MTN and Vodacom subscribers payed up to 2,600% more for data.

The report further states that prepaid customers pay more for data with in-bundle and out-of-bundle pricing being anywhere between 200% and 2,600% more expensive. In his inaugural State Of The Nation address (SONA), President Cyril Ramaphosa spoke to the need for more access to technology promising the allocation of more spectrum for increased competition in the telecommunications industry.

In a recently released policy discussion document by Finance Minister, Tito Mboweni, on revitalising the South African economy, National Treasury proposes the rapid release of the radio spectrum. This is responsible for communication over airways by communication tools such as television, radio and mobile networks.

Government has not escaped sharp criticism from both the telecommunications industry and experts in the field who continually highlight failures in policy directive on the allocation of spectrum, which has resulted in slower growth across the sector.  The digital migration deadline of June 2015 was missed by government and continues to be a moving target which in turn affects related industries. Digital migration will lead to the release of spectrum for telecommunications service providers which some believe may lower the prices of mobile tariffs.

The technology revolution

South Africa, and the rest of the world, is on the cusp of a technology revolution which is changing every aspect of life, work, health and play. The importance of affordable, reliable and fast internet access is more critical than ever for growth and competitiveness in the global economy.

The telecommunications industry is earmarked by the South African Government to drive economic growth and foster innovation. It has the ability to help revitalise the South African economy and to act as a catalyst in stimulating job creation in the Fourth Industrial Revolution.

What matters now

Passing the baton between government and the telecommunications industry, without a resolution in sight, is not helpful for the South African economy. The cost of connectivity in South Africa, especially for prepaid customers, remains inaccessible for many and affects the growth of small business which can help with more job creation.

With South Africa facing about 30% unemployment and retrenchments across many key sectors, the cost of data and access to technology may turn the tide. Some emerging economies with vibrant small business communities, such as Kenya make use of mobile networks and devices to grow their trade and create jobs. A collaboration with government, telecommunications companies, civil society, small business representation and other stakeholders can move the country and the continent forward.

Refiloe Molefe

Refiloe Molefe follows all things print at Ornico, which translates into insights and understanding on the impact of news on brands, business, government and society in general. He has a passion for trends in The Fourth Industrial Revolution. Molefe is an advocate for the positive impact of technology in the advancement of humanity.
Follow Refiloe Molefe on Twitter: @Refzology

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