OpinionPREMIUM

ARTHUR GOLDSTUCK: Corporate sadism costs users a bundle on data

This week, South Africa's communications regulator, Icasa, finally started its engine for reducing the absurdly high cost of data. It will accept submissions until the end of next month to assist in its investigation. The premise of the exercise is "to identify priority markets in the electronic communications sector", with a view to imposing "appropriate and sufficient pro-competitive licence conditions on licensees where there is ineffective competition, and if any licensee has significant ma...

Picture: ISTOCK
Picture: ISTOCK

This week, South Africa's communications regulator, Icasa, finally started its engine for reducing the absurdly high cost of data. It will accept submissions until the end of next month to assist in its investigation.

The premise of the exercise is "to identify priority markets in the electronic communications sector", with a view to imposing "appropriate and sufficient pro-competitive licence conditions on licensees where there is ineffective competition, and if any licensee has significant market power in such markets".

The market study will be followed by a discussion document and public hearings before publication of a findings document. Only then will remedies, if any, be announced.

That is commendable, but Icasa would save itself a lot of trouble if it replaced the complex investigation of market forces with simple arithmetic.

The same arithmetic would have forestalled the embarrassing failures of high-profile campaigns to bring down the cost of data.

Both the #DataMustFall and #SocialMediaBlackout campaigns saw the issue as high overall data costs. Both were wrong.

The truth is that the cost of mobile data is astonishingly low if you can afford a contract or a large data bundle.

The real issue is that, if you cannot afford to buy your data upfront in this way, you end up paying among the highest data prices in the world.

It is then that you find yourself consuming data via your airtime. Or - when a data bundle has been used up - at "out-of-bundle" rates.

Both are punitive, meaning the operators punish you either for being poor and not being able to buy data in bundles, or for being a loyal customer and using more data than you had planned.

Both of these represent a form of corporate insanity at best or, at worst, corporate sadism.

In what moral universe is it acceptable to punish people for being poor, or for being good customers?

Among the early findings of the Internet Access in South Africa 2017 report, due to be released by World Wide Worx shortly, are that a quarter of South African smartphone users do not use mobile data on their phones.

In other words, as many as seven million people have devices capable of accessing the internet, but cannot afford the high cost of using data on an ad hoc basis.

Why not simply bring down the ceiling price? At Cell C and MTN, that would mean cutting it from 99c, and at Vodacom from R2. Ironically, it is only the much-maligned Telkom that has a reasonable out-of-bundle rate, a "mere" 29c per megabyte.

It has been claimed that bundles help in capacity planning, but analytics of actual use provide far better predictions than how much data has been bought.

Why do mobile operators risk public outrage by charging so much to a segment of the market that generates the least average revenue?

One executive confided that he welcomed Icasa forcing his hand, so that he would not have to incur the wrath of shareholders who wanted high margins maintained.

In that case, Icasa would be doing consumers and the operators a favour by mandating a price ceiling that would make data affordable at the bottom end of the market as well as at the top.

Goldstuck is the founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter @art2gee

Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.

Comment icon