While the effective prices of data in South Africa may be well below the advertised price of the 1GB measure used internationally, users, especially those in lower income category, are spending significant portions of their income, around 20%, on relatively small amounts of data (1GB). This is because data prices still remain relatively high, but also because people are using a wider range of services more extensively. This now requires operators to build out next generation networks and increase their international and local capacity to meet demand and attempt to retain the quality of their networks.
The real cost of rolling out next generation broadband networks, both backbone and wireless access networks is high. This is true all over the world but particularly in Africa and parts of South Africa, where complementary investments in power and roads infrastructure are required to build out networks to often poorer communities where returns on investment are not guaranteed. An enabling regulatory environment that supports the roll out of broadband services cost effectively, is determined to a significant degree by the administrative and regulatory costs of securing licences, spectrum and sector specific levies.
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