MTN reduced its mobile data prices from 1 May as part of its agreement reached with the Competition Commission.
This means the cost of the company’s 1GB monthly data bundle, which was under scrutiny by the commission, reduces from R149 to R99. Data prices for its 30-day bundles have already been decreased by up to 50% during April.
Vodacom, Telkom and Cell C have also reduced their data prices after agreements with the Competition Commission. This followed a long investigation by commission staff which concluded that internet rates for prepaid packages were too high.
Is connectivity now really affordable for the poor?
But, even though prices have been reduced, is this enough to make connectivity affordable for the bulk of poorer South Africans, and bring the power of the internet to them?
The United Nations and many countries around the world already regard internet access as a basic human right in the 21st century.
Speaking to Business Day, Arthur Goldstuck, MD of technology market research firm World Wide Worx, said the price reductions were “a good start, and one cannot dismiss a 33% rate cut as a token. Small data bundles have been cut by up to 40%, which makes a significant impact on the affordability of data.”
However, he believed this still did not address the need for truly low-cost data for the poor. Goldstuck said data prices have been falling for many years for those who can afford large bundles.
Now it was falling for those further down the chain, although it still needed to reach people at the bottom of the pyramid, he told Business Day. “Namely those who perceive themselves as being able to use data only on an ad hoc basis [and] don’t believe they can afford large bundles, and therefore use data off their airtime, which remains expensive.”
Competition Commission has been critical of excessive pricing for data
The Competition Commission announced in March that the cost cuts will save the consumer R2.4-billion. The regulator has been highly critical of the telecom companies, saying they have been charging “excessive prices” for data.
Competition commissioner Tembinkosi Bonakele said that South African’s were paying more for data than their African counterparts.
“South Africa performs poorly compared to other countries on data costs. South African prices are higher than in other countries serviced by Vodacom and MTN,” he said. “This finding is perhaps demonstrative of poor structuring of data services.”