Data prices must come down, and mobile networks must stop being blacked out and clogged

Data prices must come down, and mobile networks must stop being blacked out and clogged

Charles Mulapisi, CEO of mobile network giant MTN South Africa, It said He assured shareholders in early June that MTN would increase its revenue by continuing to implement inflationary price increases. He said that the reason for this increase is the shedding of loads.

This step would be at the expense of consumers and should be avoided.

The electricity crisis in South Africa is very real. According to CSIR Power generation statistics2022 was the nation’s most intense year of load shedding yet. December 2022 was the month with the highest load shedding ever, and it alone had more load shedding than any other previous year.

But this shouldn’t be an excuse to charge higher fees for essential services or a time to take advantage of a crisis, something we’ve seen other big companies do regularly. Like in 2020, when companies used the pandemic as an opportunity cash inflows By raising the prices of basic commodities – including food.

In light of this, if MTN is really doing its best, it is important that the company be transparent with regulators and consumers by gauging the impact of load shedding on its operations.

In 2020, Vodacom and MTN lower their data rates. This came after the competition authority published a dossier final report Inquiry about the data services market. The investigation was launched in 2017 at the behest of the then Minister for Economic Development (now Minister for Trade and Industry) after a public outcry over the high cost of data in South Africa.

It was in this inquiry that instead of explaining the price discrimination faced by low-income consumers, then MTN CEO Godfrey Motsa concerned himself with moral education about how people spend their money: “We want them to buy more from the internet. I wish people were They buy more money [sic] More on the Internet than drinking alcohol and tobacco.

in agreement with application For the investigation, the commission found that the pricing structure of the large networks is anti-poor and lacks transparency. “Low-income consumers who purchased smaller data packages experienced inexplicably higher costs per megabyte than consumers who purchased much larger data packages,” she said.

The committee also made recommendations prioritizing immediate relief to consumers over data pricing. One of the main recommendations was that Vodacom and MTN cut data rates by 30% to 50% or face prosecution, with the two networks subsequently entering into agreements to reduce data prices in 2020.

Now, if MTN did indeed raise its rates, reversing its 2020 cut, it would not only be to the detriment of consumers, but it would also undermine the network’s agreement with the Competition Commission to lower data prices. this is unacceptable.

One argument that mobile operators have made for years is that higher data costs are the result of delays by the telecoms authority in licensing additional spectrum. This is a claim MTN continued to make even on the day the Competition Commission’s report was released in 2019, to which MTN responded by claiming that “The biggest hurdle to lower data pricing remains spectrum“.

Undoubtedly, spectrum limitations have been a barrier to expanding coverage and allowed for more effective competition. But as I did previously arguedIt cannot be assumed that spectrum licensing will result in lower data costs, particularly for consumers living on average or below average incomes.

In March 2022, the Communications Authority The first spectrum auction has concluded, with another set to take place the following year. MTN was one of the qualified bidders in this process and submitted a bid successfully. Therefore, planned price increases occur after spectrum has been licensed, further exposing the claim that additional spectrum will result in lower prices to be untrue.

Yes, getting rid of overloads is a crisis for many businesses—especially small businesses. But it cannot be ignored that this crisis has also had a negative impact on consumers – especially low-income consumers. Unjustified price increases will add to the burden. Given how operators have failed in the past to provide a proper justification for the current price differences between prices on packages purchased by lower-income consumers versus wealthier consumers, this should be a particular concern.

While querying the data services market did not solve all the problems in the telecom sector, which it never was supposed to do, it was an important step in the right direction. It is a move that has provided some relief to millions of consumers and must be protected against those whose only interest is profit. DM

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