Cape Town – Telecommunications and Postal Services Minister Siyabonga Cwele said the price of data in South Africa remains “sticky” at some level, which suggests lack of competition among dominant players in the industry.
In a media statement ahead of his budget vote speech in Parliament on Wednesday, Cwele said his department is mindful that South Africans believe data prices must fall.
He was citing a report by the Independent Communications Authority of South Africa (Icasa) which shows that data traffic has increased by 55%, while data revenue increased from R30bn to R38bn. Although employment in the sector dropped by 4 000 prices have not come down from a certain level, Cwele said.
READ: Vodacom CEO says data prices could fall even further
To this effect, the minister issued a policy directive to Icasa to prescribe regulations to ensure “effective competition” in broadband markets.
“This situation (of high data prices) may need the attention of the Competition Commission,” Cwele said. “We appeal to operators start competition in services to ensure the cost of data and voice calls fall to affordable levels or below 2% of average household income.”
Late last year, the so-called #DataMustFall trend went viral on social media, driven by radio personality Thabo “Tbo Touch” Molefe who said that South Africa’s data prices are “daylight robbery” and that data costs must drop.
Parliament’s portfolio committee on telecommunications and postal services subsequently hosted public hearings at which government, mobile networks, Icasa and the public gave their input.
Cwele further said an urgent high level study will be conducted to determine how much spectrum should be reserved for the intended wholesale open-access network (WOAN).
READ: Why SA's new ICT policy could break the industry
“If there will be remaining spectrum it will be licensed to operators with rural coverage obligations. In such case the licensees further committed to buy at least 50% of WOAN capacity,” Cwele said.
According to him, new entrants - particularly black entrepreneurs and small businesses - will find it impossible to enter this industry without WOAN.
In the department’s 2016 integrated ICT policy white paper, the intention was to reserve high-demand broadband spectrum for the planned WOAN. Read Fin24's top stories trending on Twitter: