The Free Market Foundation (FMF) is concerned about what it has described as "emotive hype and knee-jerk endorsements" that have been floating around in light of the #DataMustFall campaign.
In recent months, South Africans have taken to social media to express their frustration over the high cost of communication in the country.
Led by media and radio personality Thabo Molefe, popularly known as Tbo Touch, the social media campaign called on operators to lower the cost of mobile data.
The result: Parliament's portfolio committee on telecommunications and postal services hosted public hearings with stakeholders, mobile operators and civil society organisations on the cost to communicate in SA.
FMF executive director Leon Louw delivered his presentation titled "Data should stand - at least until the facts are known" yesterday, where he said a clear grasp of all the facts on the cost of data needs to be understood first.
During his presentation, Louw challenged accepted industry facts, misguided public opinion and absence of tough questions for both sides of the data must fall movement.
According to Louw, interrogation and better analysis is required if data is to really fall.
Critical questions such as why data must fall, by how much, who will benefit and at whose cost need to be considered, he said. "There is a need for facts...a realistic and informed climate of the information of the cost of data."
No regulation
The FMF describes itself as an independent public benefit organisation founded to promote and foster an open society, the rule of law, personal liberty, and economic and press freedom as fundamental components of its advocacy of human rights and democracy based on classical liberal principles.
Jayne Boccaleone, who handles media relations and communications at FMF, explained the foundation's interest in the data must fall movement stems from wanting to prevent knee-jerk government intervention with unnecessary regulation.
"We are against unnecessary regulation per se, and that is the driving force as to why we are looking at this subject.
"We want the facts to be known, we want a proper analysis and interrogation of all the issues that are driving data costs in SA and we feel that hasn't been done to date. It's been a fairly superficial getting hold of a few headline comparisons without looking at all the underlying factors that actually affect costs of data."
Louw said the foundation's bias is that it is pro-freedom and no regulation.
Cost of communication
According to Anesu Charamba, team leader for ICT in Africa at Frost & Sullivan, the analysis firm believes data cost in SA is high, in comparison to peer economies, namely Brazil, Russia, India and China, and regional countries.
"That being said, it's important to take into account the unique competitive environment in which South African firms operate from a regulatory and infrastructure perspective," he says.
Thecla Mbongue, senior research analyst at Ovum, agrees that data costs in SA are still high when compared with the ratio to the average South African income.
She explains: "Telcos definitely try to maintain profitable margins but critics should also take into account the cost of rolling out and providing data incurred by telecoms operators. There is a gap in terms of infrastructure legacy, which most operators in developed countries did not have to overcome and which led to more expenditure from African telcos' side.
"In SA, specifically, Telkom is yet to give access to key parts of its network, which led Internet service providers and mobile operators to build what they required from scratch. At the same time, data users across Africa rely a lot on content with servers based outside the continent; connecting data internationally also has an additional cost incurred by the telcos and they reflect that in their pricing."
Director of enterprise research at Africa Analysis Richard Hurst says the issue of the fall of the cost of data services will require the participation of a number of parties.
"The network operators themselves would like to see the cost of data fall, since this will imply more users on the network, as and when they have the appropriate capacity...We have seen that as and when these elements come down and there is an increased competitive environment, the cost of data has fallen.''
Charamba notes prices have indeed fallen over the past decade for a number of reasons, including increased competition, increased infrastructure development and improved data compression technologies, among others. "Whilst the downwards trend has stalled somewhat, what will be interesting to see, is what spurs the next industry-wide decrease in prices going forwards, whether it's driven by a price war for access to consumers or an expansion of service/product offerings."
Taking action
Analysts are of the view that government is right to get involved in trying to get the cost of data to fall.
According to Mbongue, since government is meant to guarantee and oversee South African consumers' rights, it is right to get involved in this data cost movement.
"This should be done, in this case, via the telecoms regulator, the Independent Communications Authority of SA. I would have, however, expected government to go for a dialogue, knowing that its fully-owned company, Telkom, also provides data services and at the same cost as the other networks."
Charamba explains that government has a role to play, but it shouldn't be with the goal of specifically driving down costs; the long-term implications of direct intervention are difficult to predict.
"To that end, government's role should be to develop and implement sound policies that will enable a competitive environment and continued infrastructure development in the telecoms sector, thus benefitting consumers through improved service delivery and eventually decreased prices," he says.
According to Hurst, the role government should play should be an enabling factor in the market.
"We have seen a stagnation of the growth of mobile broadband in the country as we have lacked the access to the appropriate spectrum, and in the wake of the recent National Integrated ICT Policy White Paper, we can expect that the allocation of the much-needed 4G spectrum will be further delayed, stifling mobile broadband growth.
"So to sum up: the price of data services will fall if we let the market forces play their role as we foster a competitive market with access to appropriate infrastructure," he concludes.
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