While the Competition Commission (CompCom) demands much cheaper or even free services from mobile network operators (MNOs), government is not coming to the party by releasing spectrum.
This is according to the Free Market Foundation (FMF), which says government’s role in keeping data costs high, through its failure to allocate more radio frequency spectrum (airwaves), is not widely understood.
Data usage has sky-rocketed since the Covid-19 crisis, and now the lockdown, began. It has reignited misinformed howls of rage that data in South Africa is too expensive, the foundation notes.
It adds that MNOs are struggling to cope with the massive surge in demand yet – unlike in nearly all other competitive sectors – they have not increased data prices.
FMF CEO Leon Louw comments: “There is a loony notion, a kind of ‘madness of crowds’, in which almost everyone believes whatever nonsense is regurgitated about South Africa supposedly having abnormally high airtime and data charges.
“This myth does not stand up to objective scrutiny. Pricing of data in South Africa has unique aspects, but nevertheless prices here, on average, fall into the middle range globally. Industry insiders say that the Competition Commission got its sums wrong. They should release the basis of their analysis, then we can assess the accuracy of their evidence and assessment.”
The FMF believes the solution to supposedly high data prices is for the government to release more spectrum, something it has failed to do.
“Without more spectrum, MNOs must add billions to the cost of squeezing more data into needlessly throttled bandwidth,” the FMF states. “Insufficient spectrum prevents prices from falling. The cost of ‘free’ data must be imposed on someone. The ultimate victims are consumers, especially the poor.”