Policy Brief 2
Despite recent mandatory data price reductions by the dominant operators, data pricing in South Africa remains high. According to The State of ICT in South Africa report, most South Africans cannot afford to go online due to data costs, lack of internet-enabled devices and digital literacy, all of which are associated with poverty, are the main barriers to getting online. Research ICT Africa’s Retail African Mobile Pricing (RAMP) Index, shows that South Africa performs poorly amongst other African countries, ranking 33rd out of 46 countries in terms of data per gigabyte (GB) costs, as at 2020Q1. Since we do not expect altruism by mobile network operators, it is therefore important to understand that the reduction in mobile tariffs was not in response to the COVID-19 pandemic, but a compliance to the Competition Commission Data Services Market Inquiry.
Highlights
- This policy brief presents the data tariffs which have been reduced by MTN and Vodacom in South Africa from R149 per one GB to R99 per GB with effect from 1 April 2020.
- The two companies reduced data prices in response to the Competition Commission’s threat of prosecution and not, as the impression may have been created, as a response to the COVID-19 pandemic.
- Due to lack of regulation and an inherently imperfect market, even after the reduction, prices remain anti-poor.
- The price reduction also does not provide any relief to the nearly half of South Africans that remain offline. Any strategy to reduce prices has to be accompanied by one to bring the unconnected online.
