SA competition authority keen to take on high data costs
26 May 2017
The man at the helm of South Africa's competition authority has expressed willingness to investigate the high cost of data following cautionary advice in parliament from the country's telecoms minister Dr Siyabonga Cwele.
While delivering his opening speech during a budget vote, minister Cwele said the annual State of the ICT Sector Report, issued by the Independent Communications Authority of South Africa (ICASA), seems to suggest that there is a lack of competition caused by dominant telcos in the South African market which may need the attention of the competition commission.
Tembinkosi Bonakele, Competition Commission Head says, "Institutionally this is a complex issue but we actually share the concerns. I think as regulators we are increasingly under pressure to do something about communication, particularly data. It is worrisome because of its impact on the economy. I mean if you look at the South African infrastructure, we should have had advantages that are more than many other countries, especially in this continent, that are now ahead of us like Rwanda and Kenya. Part of the problem has been said to be this data (costs)."
Bonakele says the Commission has the option to immediately investigate data pricing, but has to consider the likelihood of an overlap between institutions empowered to conduct probes of this nature.
He adds that the decision by the minister as a policy maker to take a lead on the issue by pushing for the lowering of costs is all the better.
"I don't know, to be frank, how we are going to navigate the institutional complexities because you have ICASA which is the regulator, but we have recently done a case that was referred to us, on voice. We dropped that case in particular because voice is becoming irrelevant as a competitive factor in this market. Voice was not a strategic area for us to get involved. We may run an investigation, there is a possibility of a market enquiry - although we have to see what mandate ICASA may have over that. There is also a possibility of joint work with ICASA. At this stage, we are going to have to think about how to approach it."
Bonakele, who is also chairperson the African Competition Forum (ACF), says the issue of data costs is one that could also be escalated to a continental level in the near future through the organisation.
He says the ACF is currently looking at a few matters that involve ICT and telecommunications, including the high cost of roaming on the African continent.
Competition in telecoms
A report released two weeks ago by public-interest think-tank Research ICT Africa into the cost of mobile broadband found that Rwanda performs better than Kenya and South Africa, based on the cost of 1GB of data in each country.
Dr Alison Gillwald, Executive Director of Research ICT Africa says liberalisation of the mobile telecommunications markets in Rwanda, which ended the monopoly of MTN in 2006, has ignited competitive strategies in the country due to the entry of Airtel and Millicom/Tigo.
"Competition in the telecommunication industry is one of the main determinants of pricing and innovation. A competitive market is likely to offer low prices, granting the opportunity to connect to members of almost all income brackets and thereby push the country closer to achieving its universal access targets."
Gillwald's sentiments echo Minister Cwele's call for new entrants in the South African market.
Cwele told parliament that according to ICASA's State of the ICT Sector Report, while data traffic in South Africa increased by 55% last year - along with an increase in data revenue from 30 billion to 38 billion, 4000 jobs were lost and data prices remain high.
He says ICASA's fact-finding probe into the cost of data and competition in the ICT sector, following his policy directive last year, is expected to be completed within the next two years.