First step to reduced data prices good

The investigation by the commission and its recommendations will go a long way in opening up the industry to more competition, the writer says.
The investigation by the commission and its recommendations will go a long way in opening up the industry to more competition, the writer says.
Image: 123RF/Andriy Popov

The Competition Commission took the first and important step towards reducing data costs in the country yesterday.

Its recommendations that cellphone operators such as Vodacom and MTN slash their data prices by up to 50% early next year must come as welcome news for consumers and the country's economy.

LISTEN | What lower data cost will mean for SA 

Despite SA having been the first to introduce mobile phone technology on the African continent, its pricing structure is uncompetitive when compared to countries such as Nigeria, Rwanda and Ghana.

This is largely because the industry locally has largely operated as a duopoly, with the two major operators basically setting prices for the market.

The investigation by the commission and its recommendations will go a long way in opening up the industry to more competition.

The high cost of communication is one of the biggest barriers to economic growth in the country. It increases the cost of doing business for investors while preventing the poor from having access to information at affordable prices.

We, therefore, welcome the move by the commission and hope that all the players in the industry will accept the recommendations and begin implementing them without delay.

The government must also play its role. Its reluctance to release more spectrum to operators contributes to data costs remaining high.

Cabinet ministers, ruling party leaders and other senior political figures cannot chant "data costs must fall" with the masses while they dither on policy issues that cause the prices to remain high.

The sooner they realise that the delays are strangling economic growth, the better.

Mobile telephony, television and many other spheres of communication would benefit greatly from more spectrum being made available. This, in turn, will see more content being generated locally for these platforms, thereby boosting the economy and creating new jobs along the way.

It is for these reasons that we believe that the Competition Commission's announcement is only the first of many steps that should be taken to stimulate economic growth in SA.

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