Competition Commission probe on high cost of data on the cards

Woman holding cellphone - Stock
Woman holding cellphone - Stock

Telecommunications Minister Siyabonga Cwele wants the Competition Commissioner to probe the high cost of data in the country.

Presenting his spending and policy priorities for the 2017/18 financial year‚ Cwele lamented the stubbornly high cost of communication‚ saying this now needed the intervention of the Competition Commission‚ through a probe into prices in the cellphone and telecommunications industry.

Cwele said the cost of data was not about to drop anytime soon due to a lack of competition in the telecommunications market‚ which is dominated by four big operators – Vodacom‚ MTN‚ CELL C and Telkom.

The telecoms minister last year issued a policy directive to the Independent Communications Authority of South Africa (ICASA) to prioritise an inquiry and regulations to ensure “effective competition in broadband markets“.

This followed a “data must fall” campaign on social media as well as public hearings in parliament on the cost to communicate.

 “The response from the regulator suggests they will finalise this work in the next 2-3 years. Furthermore‚ ICASA’s state of ICT report seems to suggest a lack of competition‚ particularly by dominant players.

 “The situation may need the attention of the Competition Commission‚” said Cwele.

 He said his department was still going to meet with ICASA and “really push them because this data must fall thing is big“.

 “We just experienced a bruising fees must fall [campaign] and we don’t want to cause bruising to our companies. They’ve got critical investments we want to protect. So that’s why I’m urging the industry. That’s why we’re also saying ICASA must focus on this (data). There’s no point in focusing in all segments. Voice calls are no more an issue today. They have no impact on costs because people are using data. It’s about data costs‚” said Cwele.

Cwele said he wants ICASA to focus on broadband markets because that’s where the problem is.

He said ICASA’s report indicates that data traffic had increased by 55% while data revenue was up from R30 billion to R38 billion.

But this did not translate into improved job creation in the sector.

“The employment decreased by 4‚000‚ yet prices remain sticky at the same high level‚” said Cwele.

He said data is “a big thing” in South Africa hence it was mentioned by President Jacob Zuma in his state of the nation address.

“So there are other measures and the real effective measures to bring the cost down is fair transparent competition‚” said Cwele.

 

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