The Department of Communications and Digital Technologies (DCDT) aims to commission research on SA’s cost to communicate.
The goal is to investigate the feasibility of developing regulations, policy and/or strategy that could bring about further reductions in the cost of data, it says.
In its tender documentation, DCDT says reducing the cost of data, to enable affordable communication and economic growth across communities, remains a key priority for government.
“DCDT recognises the importance of access to internet services since it has immense potential to improve the quality of people's lives. As a result, policy-makers are focusing on unlocking the potential of internet access, which includes creating an enabling infrastructural environment, bridging the digital divide, and providing affordable data prices and devices.”
Dissatisfaction with the price of data is not a new discussion. In 2016, South Africans took to social media to express their frustrations with local mobile operators, resulting in the #DataMustFall movement trending on various sites, receiving widespread media attention and attracting Parliament’s attention.
Mobile operators have always claimed the situation is not quite as simple as thought. Smaller players regularly point to the inhibiting dominance of MTN and Vodacom and want access to their infrastructure. Most of the players, however, claimed lack of spectrum is a major factor, resulting in capacity restrictions which prevent prices from declining.
Economic factors
Noting the significance and importance of data access as a driving force that may help the country become more competitive in the global market and prosper economically, DCDT says it is critical the cost of communication services be reasonable to all communities in order for the populace to have access to data services.
However, this is not currently the case, it says. “The study conducted by Research ICT Africa's Retail African Mobile Pricing Index indicates the cost of data in SA is still high. Yet again, the research stipulated SA performed poorly among other African countries, ranking 33rd out of 46 in terms of the price of 1GB.
“In SA, most citizens cannot afford to go online due to data costs, lack of internet-enabled devices and digital literacy, all of which are associated with high unemployment, which has risen from 32.5% in the last quarter of 2020 to 32.6% during the first quarter of 2021.”
Work in progress
DCDT points to the work it has done over the past year in collaboration with the Independent Communications Authority of South Africa (ICASA) and the Competition Commission to bring about a reduction in data costs.
“In December 2019, the Competition Commission released the final report of the Data Services Market Inquiry, which was conducted to understand and investigate factors of features of the market that led to high cost for data services. The report confirmed the cost of data services, predominantly on prepaid prices, is high when benchmarked to other peer countries. Again, the profitability for mobile network operators (MNOs) in SA exceeds that of other MNOs in similar markets.”
Speaking at the release of the provisional report, Competition Commissioner Tembinkosi Bonakele said a "disturbing finding" from the commission’s benchmarking exercise was that "lower income consumers may be exploited to a far greater degree relative to wealthier consumers for mobile data prices".
As a result, the department initiated various interventions with ICASA and the Competition Commission that saw the reduction of average data prices by approximately 33% to 35% per 1GB across major operators.
Additionally, in line with ministerial COVID-19 policy directions, ICASA gazetted regulations that prescribed minimum standards that licensees must adhere to for the lockdown; as well as temporarily releasing high-demand spectrum to ease network congestion and maintain good quality of broadband services for consumers. Some Department of Basic Education and Health sites were zero-rated, which resulted in less data expenditure for consumers.
Study specifics
As to the expectations for the study, the department's tender documentation specifies five key elements must be addressed:
1.To undertake the impact assessment (consumer) of the current regulatory, policy and strategic interventions of the cost to communicate programme;
2.Benchmark trends in the ICT sector aimed at enhancing affordable access to data;
3.Propose interventions to position SA to be as competitive with peer comparison countries in terms of data prices, usage, accessibility and quality of service;
4.Evaluate factors that contribute to the high data cost and advise government on measures that should be undertaken to lower the data costs; and
5.Consideration of policy and regulation scenarios for COVID-19.
The department has stipulated a time frame of 18 weeks for the project, from date of appointment to finalisation of the report.
Interested parties have until Monday to submit questions related to the tender and 12 October to submit bids.
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