Did data must fall lobby misrepresent the facts?

Consumers want faster data at lower prices, yesterday. This is the sentiment behind the #DataMustFall movement, which is agitating for lower mobile and fixed-line data prices. But is this complaint valid and even if it were, would more government regulation be an appropriate response? No, on both counts, argues renowned writer and commentator Ivo Vegter in a recent talk given at the Free Market Foundation (FMF) in Johannesburg. It appears that the vested interest data must fall lobby has grossly misrepresented the facts.

According to Vegter, government interference, failed policy, bad regulation and poor implementation have created a market in which apparently a few mobile network operators hold dominant positions and charge frustrated consumers high prices for data. The speed and intensity with which the data must fall campaign spread headline comparisons widely across social media showing South Africa to have exorbitant data charges, left many in the industry reeling and consumers outraged.

The FMF is concerned that the misinformed push towards lower data prices appears to have been an influential factor in the recent Information and Communication Technology (ICT) Policy White Paper, which intends a radical shake up of the ICT industry and has far-reaching implications for mobile network operators. Has it played a disproportionate and inappropriate part in formulating policy? Has the DTPS been too quick to accept the whims of a social media campaign and is it using negative public sentiment to drive through more bad policy?

Vegter raised the question of whether data is really so much more expensive than elsewhere in the world and concludes it is a complex and difficult question. Voice and data products are difficult to compare across different operators and countries. The widely circulated gang of four meme that took social and mainstream media by storm is blatant misinformation. It used the lower cost of 1 GB – R11 – in India offered as a limited special by a small operator and compared it with a standard out of bundle price in South Africa – R149. Bizarrely, the Parliamentary Communications Committee states that special pricing used by operators cannot be included in the calculations of the cost to communicate in South Africa yet this is a standard marketing tool used all over the world and has a significant impact on the average price of data.

On a pure price basis, South Africa compares fairly well with other countries, Vegter maintains. “At the high end of the mobile market, South Africans pay about R30 per gigabyte from Telkom, and R50 per gigabyte from mobile operators. That’s less than Australians and Americans pay, according to research conducted by MyBroadband. New Zealanders pay about two and a half times as much as we do. India comes in slightly cheaper at R26.30, while the UK is much cheaper at only R8.38 per gigabyte.”

“At the lower end of the market, India remains a little cheaper, but Australians, Britons, and Americans all pay about twice as much as South Africans do, with New Zealanders paying almost four times as much.”

Again, contrary to prevailing misinformation, adjusting for income levels, South Africans spend on average about 2.3% of their income on ICT, according to the latest figures from 2014 compiled by the International Telecommunications Union in its 2015 Measuring the Information Society Report.

Out of 170 countries, South Africa ranks about mid-way at 80th, in terms of communication cost as a share of income, behind Brazil and China, on a par with Chile, Hungary, and Mexico, and well ahead of India.

Vegter said that a pure price comparison is complicated by many factors including the rand/dollar rate in which almost all telecommunications equipment, including handsets, is priced and the long distances between South Africa and the rest of the world, where most of the internet is located. “We are dependent on a handful of undersea cables that span long distances, mostly to the northern hemisphere. Other factors are the size and geographical spread of South Africa and population density, which makes Internet infrastructure relatively more expensive, per capita”.

That South Africa’s prices are extraordinarily high, is far from clear.


Related Content

Top 8 retail trends to watch in 2020

Consumer demands for a frictionless, personalised experience which caters for their lifestyle needs are set to drive online retail trends in 2020. The result is a focus on creating a customised experience that supports and enhances shopping in the virtual environment, facilitating the buying journey.

Op-Ed: Mainstreaming gender in African policy making: Ensuring no voice is unheard

Despite remarkable progress made on women’s participation in policymaking, Africa is still far from achieving the 50 percent gender parity target set by the UN’s Sustainable Development Goals (SDGs).

FMF: What SA should do to improve its economic freedom ranking

South Africa has ranked 101 out of 162 countries that are economically free; this is according to the 2019 Economic Freedom of the World report. South Africa has fallen 54 places since 2000 when it ranked 47th in the world. Hong Kong and Singapore tops the chart as they represent the two most economically free countries in the world. Joining CNBC Africa for more is Leon Louw, Executive Director at the Free Market Foundation (FMF).

Joyce Msuya on achieving sustainable development in East Africa

Last week saw the Kigali Global Dialogue where thought leaders came together to discuss global contemporary issues of development and growth. The talks centered around human policy, technological transformation of society, public health and climate change and sustainability. One of the key speakers on these topics, Joyce Msuya joins CNBC Africa for more.

Subscribe to our newsletter

Sign up for free newsletters and get more CNBC AFRICA delivered to your inbox

More from CNBC Africa

When a barrel of oil was cheaper than your coffee | CNBC International

Demand for oil has fallen to unprecedented levels, resulting in oil prices turning negative for the first time in history. From the price war between Saudi Arabia and Russia to the pandemic, CNBC’s Nessa Anwar explores what this might mean for the commodity in the long-term. ----- Subscribe to us on YouTube: http://cnb.cx/2wuoARM Subscribe to CNBC International TV on YouTube: https://cnb.cx/2NGytpz Like our Facebook page: https://www.facebook.com/cnbcinternational Follow us on Instagram: https://www.instagram.com/cnbcinternational/ Follow us on Twitter: https://twitter.com/CNBCi...

COVID-19: Reopening aviation in South Africa

South Africa’s aviation sector partially reopened from Covid-19 lock-down’s this week, with the resumption of domestic business travel being allowed to take off. To understand what steps have been taken to maximise passenger safety at the country’s airports we speak with Refentse Shinners, Group Executive of Corporate affairs at the Airports Company of South Africa.

What It’s Like To Be A Professional Amazon Reviewer

Sean Cannell makes tens of thousands of dollars a month as a professional Amazon reviewer. As part of the Amazon Affiliate program, Cannell reviews camera gear on his Think Media YouTube channel and makes a cut of every sale those reviews generates o

Rebuilding South Africa’s construction sector

The COVID-19 pandemic, coupled with South Africa’s slowing economy has created a double setback for the construction industry. That’s according to financial services group Old Mutual. Last month construction firms, Group Five and Esor, both in business rescue announced that they would be delisting from the JSE. Today, WBHO warned annual profits would plunge 150 per cent, reflecting the impact of the Covid-19 lock-downs. Ian Woodley, Analyst: Old Mutual Equities and Arthur Karas, Portfolio Manager: Old Mutual Investment Group Macro Solutions join CNBC Africa for more.

Partner Content

Sanlam Emerging Markets and its partners on the African continent invest over $12 million to fight COVID-19

As we go through this global pandemic together, it is the little things we miss. A high five, a handshake, a walk...

VIVO CEO is a dynamic leader for this innovative global brand

May 2020 -- Six months ago the vision for vivo in South Africa was just beginning to...

Trending Now

Is there space for specialty items in post-Covid-19 Rwanda?

The Kigali Farmers and Artistans Market is a monthly event which brings over 250 independent vendors together to create a shopping opportunity for items such as handmade art, clothing and accessories; juices, natural cosmetics, artisanal food items, and fresh produce. By now the event should not only have expanded to Mombasa, but this month would've been their 3 year anniversary. Now with over 2 months out of commission, what have they done to survive? And will there be a market for what they offer when they return? Kigali Farmers and Artistans Market Founder, Florence Mwashimba joins CNBC Africa for more.

Nokanda becomes first locally made App to rank #1 on Google Play Store Rwanda

This week, Made in Rwanda cashless payment app, Nokanda, a product of software company, Hexacomb; rose to the number one spot on Google Play Store’s, “Top Free” category in Rwanda. The ranking, which often belongs to social media giants such as, WhatsApp and Facebook reflects a change in priorities for mobile users in the country. CNBC Africa spoke to Ernest Kayinamura, founder and CEO of the company for more.

Jack Ma Foundation on how the COVID-19 crisis is driving innovation in Africa

As soon as the first cases of COVID-19 were announced on the continent, The Jack Ma Foundation was one of the first responders in providing PPE aid support to all African countries. Jean Pau a Senior Advisor for International Programs at Jack Ma Foundation spoke to CNBC Africa's Armold Kwizera on the philanthropic decisions of the foundation.

How COVID-19 is impacting education outcomes in the Commonwealth

The Commonwealth of Learning was created by the Commonwealth Heads of Government in 1987 to promote the development and sharing of open learning and distance education knowledge, resources and technologies. As the world grapples with the COVID-19 pandemic, we find out what this means for the future of education. Asha Kanwar, President & CEO, Commonwealth of Learning joins CNBC Africa’s Kenneth Igbomor for this discussion....
- Advertisement -