R2-per-MB out-of-bundle fees must go – ICASA
Amid complaints of how expensive it is to communicate in South Africa, the Independent Communications Authority of South Africa (ICASA) says it is implementing several interventions to ensure that data prices fall. Rubben Mohlaloga, ICASA’s Acting Chairperson, also highlighted the “crazy” out of bundle rates, which he said the regulator would look at going forward. Mohlaloga said this when he briefed the Select Committee on Communications and Public Enterprises on Wednesday.
He said an analysis of data costs since 2010 reveal a change in data costs since the advent of over-the-top services like Whatsapp and Skype and the penetration of smart devices. As a result, and also because of the call termination rate regime, voice tariffs have gone down. The out-of-bundle and in-bundle price differentials, Mohlagoa said, are relatively high, depending on the kind of bundle that consumers purchase.
“If you buy higher bundles, then you spend less per megabyte. If you buy a small bundle, say 100 or 500 megabytes, then you spend higher per megabyte. Once you are out of bundle, it is even worse – you move from an average of 5 cents to R2.
That is an area of concern [for ICASA] and we think that it needs to be nipped in the bud,” he said.
What consumers are paying for out-of-bundle data versus in-bundle data
Mohlaloga zoomed in to the cost of different data packages, and said when benchmarked with other countries, South Africans still pay higher prices to communicate. While Vodacom charged South Africans up to R270 for a 2 gigabyte data bundle, he said in Tanzania, consumers paid less than R100 for the same package. He said, for example, when one looks at in-bundle rates per megabyte for prepaid packages, if a consumer buys 100 megabytes of data from Vodacom, which is R29, they will spend 29 cents per megabyte.
On the other hand, if a consumer buys 10 gigabytes of data, they will pay 6 cents per megabyte. Mohlaloga said the same applied for MTN, whereby when one buys 100 megabytes of data, they are charged 35 cents per megabyte. The consumer would be charged 6 cents per megabyte when they purchased 10 gigabytes of data.
“That is the point that I was making that the in-bundle differential where if you are in a higher bundle, you spend less per megabyte but if you buy a small bundle, you pay higher per megabyte. I think some internal logic needs to be unpacked there. “That is an issue that also needs to be addressed.
“The crazy one is the out-of-bundle rate per megabyte. Vodacom, once you run out of your bundle, with them you are going to spend R2 per megabyte. From that 5 cents, you jump to R2.
“MTN, from 6 cents, you move to 99 cents. Cell C, from 25 cents, you move to R1.10 cents. We think that all of these differentials need to be killed,” he said.
Mohlaloga said with the penetration of smart devices currently standing at 40% and on the increase, out of bundle data tariffs are relatively high and this is the area of concern “and we think it needs to be nipped in the bud. “There is a need of a decrease in the average price per megabyte,” he said. He said the consumer activism, particularly the recent #datamustfall campaign, is important in bringing awareness in the sector.
ICASA highlights its on-going interventions
Mohlaloga said, meanwhile, ICASA was implementing a number of interventions under its “cost to communicate programme” in a bid to bring the cost to communicate down.
He said the programme includes, among others, the broadband market inquiry, which looks at the cost of data, as well as a task team that was established following a MoU with the National Consumer Commission, which looks at complaints from members of the public on issues that include the expiring and disappearing of data.
“The broadband market inquiry is intended to look at the effective competition and the reduction of data prices and the inquiry has started…” he said.