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How high mobile data prices in South Africa must be dealt with – ISPA

The Internet Service Providers’ Association of South Africa (ISPA) has said that to bring down the price of mobile data, the industry needs greater competition through wholesale deals. This follows a recent statement in which ISPA said ICASA must get on with its investigation into high data prices[1]. ICASA announced at the beginning of July that it wants to launch an inquiry to determine which telecommunications markets are priorities for regulation[2].

ISPA said ICASA is dithering and that the inquiry is not necessary. ICASA can and should cut straight to investigating the retail and wholesale mobile broadband markets, it said. “No such inquiry was conducted prior to the initial investigation and regulation of voice call termination rates in 2010,” said ISPA.

Should ICASA elect to regulate the retail or wholesale mobile data markets, that raises the question: Is ISPA advocating that its members be regulated in the same way? The association told MyBroadband that if ICASA determines there is ineffective competition in the markets where ISPA members operate, then the regulator must apply section 67(4) of the Electronic Communications Act. Regulatory interventions would only affect those players found to have significant market power.

ISPA noted that a number of its members are subject to price regulation under the Call Termination Regulations.

Market failure

“ISPA’s view – clearly shared by the Minister and many South Africans – is that there is overwhelming anecdotal evidence of a competitive failure in the market for mobile broadband services that ICASA is disregarding,” said ISPA. The association said the market failure is a consequence of its highly-concentrated nature, where the suppliers are dominant, vertically-integrated entities. While it stopped shy of mentioning Vodacom and MTN, ISPA said the dominant operators do not make non-discriminatory wholesale offerings available to other licensees in South Africa – which would allow them to compete in the retail market for mobile broadband.

This raises another question: Is ISPA suggesting that Vodacom and MTN give certain ISPs preferential access to their wholesale offerings? Vodacom has allowed Crystal Web[3] to launch mobile data products on its network, while MTN has done the same[4] for Afrihost, Axxess, and Vox. ISPA told MyBroadband that it has received no complaints from its members in this regard.

However, it believes there needs to be a clearer separation between the network and service components of the mobile operators.

“ISPA believes that this a priority to establish a genuine wholesale offering which will enable competition at the service layer.”

Now read: What you don’t want to hear about #DataMustFall[5]

References

  1. ^ investigation into high data prices (mybroadband.co.za)
  2. ^ which telecommunications markets are priorities for regulation (mybroadband.co.za)
  3. ^ Vodacom has allowed Crystal Web (mybroadband.co.za)
  4. ^ MTN has done the same (mybroadband.co.za)
  5. ^ What you don’t want to hear about #DataMustFall (mybroadband.co.za)

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