#DataMustFall: South Africa's Big Data Rip-Off

The #DataMustFall campaign failed to convince  South Africa's biggest phone companies to reduce prices

South Africans rightfully feel cheated: data prices in the country remain among the world’s highest.

The #DataMustFall campaign initiated last year did not lead to a price drop, though it did manage to raise awareness about unreasonably high tariffs that consumers are forced to cough up if they want access to the Internet.


Prepaid users can pay between 99c and R2 for 1MB of data, if they are Vodacom, MTN or Cell C customers. Telkom Mobile has dropped its prices, making it by far the most reasonable option.
"The ceiling prices of data for ad hoc users are far too high, and are holding back more rapid uptake as well as more intensive use of data in the mass market," says World Wide Worx MD Arthur Goldstuck.

 

 

He says data costs for lower-income users are the "real issue" the #DataMustFall campaign and other critics missed. Most low-income earners use prepaid services. These costs are much higher than bundles and contract rates.
Mergence Investments portfolio manager Peter Takaendesa agrees the major drivers of high data charges remain excessive out-of-bundle charges and very high rates per unit (MB) on smaller data packages — mostly used by low-income users.
Those higher charges are ultimately a function of a market dominated by two mobile operators — MTN and Vodacom.
"Smaller operators can be aggressive on pricing but they lack distribution and network coverage scale to force prices down materially," says Takaendesa.

Research ICT Africa (RIA) compared the price of 1GB of data in 50 African countries and found that SA’s average price in the third quarter of 2016 was US$7, putting it in 22nd spot. The cheapest was Mozambique, where Vodacom operates, with an average price of $2.27, followed by Tanzania at $2.39 and Ghana, where MTN operates, at $2.54.

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