The commission released its provisional report after it conducted an inquiry that included public hearings on the cost of data in the country.
“Mobile prepaid data prices in South Africa are high when benchmarked against a selection of countries and in comparison to other African countries.
“South African prices compare poorly to other BRICS (Brazil, Russia, India, China, SA) and Southern African Development Community (SADC) countries, and mobile operators (MTN and Vodacom) charge higher prices in South Africa than they do in the other countries in which they operate,” said Tembinkosi Bonakele, commissioner of the Competition Commission.
Bonakele said there was widespread public interest in the inquiry.
“We received more than 30 written submissions from stakeholders, requested information from operators and held three days of public hearings to facilitate a broader dialogue on the causes of and solutions to high prices,” Bonakele said.
The Data Services Market Inquiry was launched in August 2017. It came after numerous complaints about data costs.
“The Competition Commission made a number of findings, one of which was that the retail pricing structure of mobile data was anti-poor and lacked transparency.“The benchmarking exercise shows that lower-income consumers may be exploited to a far greater degree relative to wealthier consumers. An assessment of headline retail prices of all mobile operators demonstrates that consumers of small data bundles, generally being poorer, pay inexplicably more on a per MB/GB basis,” said Bonakele.
He said data pricing lacked transparency, which undermined competition.
“Operators prefer to use promotions and free data than to drop prices. As a result, few consumers know what they really pay per MB,” said Bonakele.
The Competition Commission also found there had been a failure to release high-demand spectrum due to delays in digital migration, and this had raised the costs of mobile operators unnecessarily.
This was because operators need to compensate for the lack of spectrum by increasing the volume of base stations.
The commission made a number of recommendations, which included that mobile operators reduce the price of sub-1GB bundles to within a maximum of 25% per MB higher than their 1GB bundles.
It also recommended that local and national government support the development of free public wi-fi in low-income areas and that alternative infrastructure be developed, in particular to provide data services in lower-income areas and smaller cities and towns.
Thami Nkosi, spokesperson for information advocacy group Right2Know, said: “We have always said data prices are anti-poor and inconsiderate of the working class. It excludes the poor from the progress of technology in our society.”
Nkosi said it was time for smaller mobile companies to enter the market.
Submissions on the findings are due by June 14.