The #DataMustFall campaign is an initiative that was masterfully founded by Mr Molefe with the intention of protesting against high mobile data prices thus being a solution for the average South African and the unemployed, who cannot access mobile broadband services as a result of the high pricing of data bundles. Following its launch and its seeming like a great initiative for the regular consumer, a number of consumer protection agencies gave it the green light, however, on the 18th of November 2016, Molefe deferred from the initial purpose of the campaign and went ahead to use #DataMustFall to advertise MTN postpaid products, regardless of his team’s prior plead to the government to support their movement. Molefe together with his colleague, Gareth had talks with mobile networks and later created their own hype that there will be a decline in data prices hence sparking great consumer anticipation. So much for raising the consumer’s hopes! That promise was delivered on the 18th November, 2016 and this is what an average mobile prepaid South Africa had to deal with.
— Tbo Touch (@iamtbotouch) November 18, 2016
Molefe and Gareth Cliff has forgotten that the majority of South African use prepaid packages. More disturbing is that they seem to have forgotten the core objectives of #DataMustFall. This is so because the products he is talking about are promotional packages, for contract consumers and these products remain unaffordable to the average income earners and the unemployed South African residents. The unfortunate thing about Molefe’s claims is that it is likely to sway customers to MTN. Note that the objective of this campaign is to help consumers to churn operators which are expensive. Hence a false statement like this is likely to have more harm on the poor who may hope for a better data prices on their prepaid packages.
Do your calculations 50 Gigs plus 10000 min calls for R149 is R3 for a Gig no network can match this. I challenge them. #MTNcybermonday
— Tbo Touch (@iamtbotouch) November 27, 2016
Data prices in South Africa still remains a concern for policy makers, regulators and consumers. The exuberant pricing strategies adopted by operators remain a challenge to the average South African consumers. For the majority of mobile consumers mobile broadband services are still prohibitively expensive. Using cheapest 1GB prepaid data basket information constructed by Research ICT Africa (RIA) (see The Cost to Communicate in South Africa policy brief for more information on the pricing methodology), the cheapest 1GB in South Africa ranks 23 out of 49 African countries in Q3 2016. While in Mozambique the cheapest 1GB prepaid data basket is USD2.27, the same amount of data is sold at USD7.03 in South Africa by Telkom Mobile. Hence the cost of 1 GB prepaid data basket in South Africa is three times of the cost of the same basket in Mozambique. Compared with other major African mobile market, the cost of 1 GB prepaid data basket in South Africa is enough to buy 3GB prepaid data basket in Egypt and Ghana, 2GB in Nigeria and 1.5GB in Kenya.
While Molefe claims that MTN data prices have fallen, 1GB prepaid data basket pricing information from RIA shows otherwise. A time series analysis of 1GB prepaid mobile price for MTN shows that MTN has used a flat rate of ZAR149 for 1 GB data from Q2 2014 to Q2 2015. MTN subsequently increased its price from ZAR149 to ZAR160 in Q2 2015. In Q1 2016, MTN reduced its price by ZAR0.10 to ZAR150 and later increased it back to ZAR160 in Q3 2016.
Compared with other operators in the market, RIA ranks MTN 1 GB prepaid price at the bottom among the 5 mobile operators in the SA market in Q3 2016. It was ranked 4th in Q1 2016 and 5th in Q2 2016. Therefore, in 2016, MTN offered the most expensive 1 GB prepaid data basket as compared to other operators in the market. The cheapest 1 GB in Q3 2016 is offered by Telkom Mobile at ZAR99, followed by Vodacom and Cell C, with a price of ZAR149 for 1 GB and Virgin Mobile at ZAR150. See figure 2 below.
Clearly data prices in South Africa has not fallen and remain high as compared to other countries in Africa. In contrast to Molefe’s #DataMusfFall Campaign, MTN data prices have not fallen. More interestingly MTN is the most expensive operator.