Prices continue to form the basis of discussion for ICASA. The price of data, the price of calling and the price of technology that allows us to do so much is always under review by South Africa’s communications industry governing body…
Africa is often labelled ‘the mobile continent’ thanks to its movement towards, and reliance on, mobile phones for all forms of communication. Whether its email, text messaging or voice calling, mobile phones are the preferred technology for almost all types of African consumer, across almost all African markets.
In a report published last year by Swedish tech company Ericsson, figures suggested that internet use on mobile phones will increase 20-fold in the next five years – double the rate of growth in the rest of the world. The report found that people in Africa use mobiles for online activities that others normally perform on laptops or desktop computers as the technology overcomes weak or non-existent landline infrastructure.
But it’s not just with internet usage where mobile phones are strong on the continent. It’s also with voice calls, thanks to the declining cost of smartphones and also the increasing network infrastructure that make even the most rural areas of the continent now more contactable than ever.
In South Africa, one of the continent’s most technologically advanced nations, access to mobile communication technology has become widespread since the dawn of democracy and in a recent report, the Independent Communications Authority of South Africa (ICASA), the regulator for the South African communications, broadcasting and postal services sector, found that Cell C now offers the cheapest rates for prepaid call tariffs as well as out-of-bundle data.
ICASA’s RetailTariff Analysis Report 2015 aimed to provide consumers with an analysis of the tariffs charged by the different mobile operators between 1 April 2015 and 30 September 2015.
According to the report, Vodacom was the most expensive, charging R1.20 per minute on flat-rate tariffs. The second most expensive was MTN, which charges R0.79; Telkom charges R0.75; and Cell C was the cheapest at R0.66.
On the data side, Vodacom, at R2/MB, was double the cost of the out-of-bundle rates of MTN and Cell C, at 99c/MB each. Telkom is by far the cheapest, at 29c/MB. The most expensive 100MB data bundle is from MTN, at R35, followed by Vodacom and Telkom at R29, with Cell C at R19.
However, despite these findings, Vodacom still represents the biggest network in terms of customer base, with about 31.4 million users in South Africa.
PRICE NOT EVERYTHING
Considering the results of ICASAs survey, you might think that the first thing everyone now does is immediately cancel their contracts and move over the cheaper providers but that is just not the case.
According to ICT expert Adrian Schofield, quality of service and investments into marketing campaigns can drive customer loyalty more than ever.
“It is becoming the norm that consumers have more than one phone and many will have at least two different service providers. The one that gets the most business will be the one with the best quality and extent of coverage, with price coming second in the purchase decision.
“In the property business, the mantra is ‘location, location, location’ and in the mobile game, it has to be ‘coverage, coverage, coverage’. Vodacom and MTN have used their critical mass to ensure that they invest in the network – to reach as much of the population as possible and to provide the higher speeds demanded by smartphone users,” he said.
PRICE COULD BE BETTER FOR DATA
In November, prior to the release of the RetailTariff Analysis Report 2015, ICASA CEO, Pakamile Pongwana was speaking at AfricaCom 2015, one of the largest tech conferences in Africa. He spoke of the ongoing need to reduce the prices of data so that everyone can have easy, sustainable access to online services.
“The price of the Internet is the most fundamental issue that has not been addressed,” he said. “It’s not just access to submarine cable infrastructure, it’s not just access to satellite capacity; but it’s also how we interact with industry and how we enable industry to do what it needs to do in order to make sure the prices are at the right level.”
He said that ICASA was active in trying to bring prices to the most affordable levels by investing in infrastructure and allocating spectrum correctly.
“If you want to attain the type of speeds that you require, you need to deploy more and more infrastructure.
“We need to make sure that more and more spectrum is available because that’s what reduces costs to operators.”
Toby Shapshak, publisher and editor of South Africa’s Stuff magazine, said in a TED talk last year: “Better and faster internet access (which is still too high despite data cost reductions) mean people can consume the news via their mobiles – something that is especially important because so many African countries still control the major media outlets.”
South Africa, like many other African nations, has developed a National Broadband Plan (NBP), which aims to ensure universal access to reliable, affordable and secure broadband infrastructure and services by 2020 but Pongwana admits that the NBP needs to be flexible and able to adapt.
“The problem that tends to happen for almost every country that develops a NBP is that it has a good plan; however, most of us do not have the flexibility to revise the plan, rework it, make sure that it is implementable and then follow through. That is the main challenge,” he said.
Considering the general consensus, that a more developed mobile data infrastructure is needed, and the general desire of all to reduce to cost to consumers, it looks like we can expect faster, cheaper data in the future.
“Africa is a mobile-only continent,” Shapshak said. “There never was a landline infrastructure to begin with, apart from urban areas. Mobile has allowed anyone to have a phone in places that were previously impassable and uncontactable. It has also been enabled, from a business perspective, by prepaid payments that handily remove the equally widespread legacy problem in that very few people have banks accounts. It really is that technology leapfrog the industry likes to talk about.”