Johannesburg – The Independent Communications Authority of South Africa (the Authority) has noted recent mainstream and social media reports about the cost of data in South Africa. There has also been requests for the Authority to respond to questions relating to data pricing.
Even though the Authority is yet to develop a specific framework to regulate data pricing, it does, however, aim to protect consumers by setting regulations which licensees must comply with. One of these regulations is the End-User and Subscriber Service Charter Regulations which was amended in April 2016 to include more protection for consumers.
The End-User and Subscriber Service Charter Regulations impose extensive transparency obligations on licensees to ensure that consumers are well informed with regards to the rules applicable to their service consumption. In terms of these regulations, network providers must now, at the point of sale or prior to contracting, inform their customers about, among other things, in and out-of-bundle rates and the rules for the carry-over of unused voice minutes and data.
The regulations further provide for a complaints handling procedure that must be adhered to by all network providers. One of the stipulations of this complaints handling procedure is that network providers are prohibited from disconnecting the services of consumers while a disputed bill (data or voice) is being investigated, provided that the consumer continues paying the subscription amount.
The Authority believes that the introduction of Over-The-Top (OTT) services has positively impacted the overall growth in the demand for data. In addition, consumers have increased their level of communication and thus their demand for data due to, among others, the use of video and photo sharing, downloading of applications, etc.
To this end, the concerns around the cost of data have inevitably surpassed concerns over the cost of voice. The cost of voice services has reduced significantly as a result of the Authority’s intervention in the wholesale voice call termination markets. Though there has not been any specific regulatory intervention in the data market as yet, the Authority notes that there has been a downward trend in data tariffs lodged and charged by operators to consumers.
The trends over the past five years indicate that average prices for data are now at least 45% cheaper than they were in 2010. This however, is not to say that the concerns raised by civil society groups and consumers around the high costs are unfounded. The trends further indicate that consumers buying large volumes of data benefit significantly from low in-bundle rates/MB, whereas out-of-bundle rates are still substantially higher.
It should be noted that any regulatory intervention by the Authority in any market (including data markets) must follow the prescripts of the law. In this regard, the Authority’s analysis of priority markets which require regulatory intervention is underway. The Authority hopes to announce the proposed steps it will embark upon in respect of the priority markets by the end of the current financial year. These steps will be in line with the prescripts of the law.
A further area of concern relates to the expiry of prepaid data bundles (and post-paid). The Authority believes that this practice is to the prejudice of consumers. To this end, the Authority is consulting with the National Consumer Commission (NCC) to explore possible measures to deal with this practice in terms of the provisions of the Consumer Protection Act, 2008.