Competition Commission may force South African networks to drop data prices

The Competition Commission has praised the government’s new spectrum policy and has promised that South Africans will see better coverage and lower data prices.

In a statement on Friday (2 August), the Commission gave its approval to the Department of Communication’s plans to establish a Wireless Open Access Network (WOAN) and offer high demand spectrum to smaller players.

“At a time when public finances are under such pressure, it is tempting to try (to) maximise revenues by simply auctioning spectrum to the highest bidder,” the Commission said.

“However, as the Data Market Inquiry provisional recommendations counselled, such short-term thinking would deny South Africa a unique opportunity to bring about lower data costs both now and in the future.

“High demand spectrum is a scarce national resource and its allocation should be done in a manner which ultimately benefits the citizens of the country,” it said.

The Commission added that it will continue to be engaged with the spectrum licensing process as the new policy takes shape.

This will include a push to ensure not only universal coverage, but also access, it said.

“This may include obligations to ensure affordable data prices immediately, but also how relative allocations between operators may shape competition going forward into new generation networks such as 5G.

“It will also include measures to ensure the commercial and competitive success of the WOAN, avoiding some of the difficulties faced by other late entrants, as well as appropriate regulatory oversight of that entity.”

Market inquiry

In its provisional market inquiry published in April, the Commission said that international benchmarking confirmed that South African data prices are high – particularly for mobile prepaid data.

It added that current data prices were ‘anti-poor’ and ‘lack transparency’, and recommended that South African telecom companies take steps to bring data prices down.

“These networks should introduce immediate relief on data pricing – including a commitment by mobile operators to reduce headline tariffs,” it said.

The Commission said that networks should also reduce the price of sub-1GB bundles to within range of an ‘objectively justifiable and socially defensible range of the 1GB price’.


Read: Communications department publishes spectrum policy

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Competition Commission may force South African networks to drop data prices