Jacob Zuma’s announcement in his State of the Nation Address – directed to “the
youth,” no less – that government has prioritised the lowering of data prices,
should immediately have raised our scepticism about the viability of his claim.
the thorough debunking of the #DataMustFall campaign because of the questionable
statistics used, his statement can only be based on the assumption that
government has a magic wand that will render data prices lower. The President,
no doubt, was referring, implicitly, to some kind of regulation or price
control already contained in the new Department of Telecommunications and
Postal Services telecommunications policy.
Vermeulen at MyBroadband has pointed
out that government – not service providers – is best placed to lower data prices.
According to Vermeulen, allocating radio frequency spectrum, allowing the rand
to strengthen, and reducing red tape, would be the recipe for success. I largely
agree, but I do not think “better regulation,” as Vermeulen calls it, is the
right way to describe it. This is an environment that demands little to no meddling
is crucial that the telecommunications department immediately abandon the
onerous provisions in the new policy that make the acquisition of a licence more
difficult for service providers, and, potentially, establish a new monopoly in
the sector in the form of a (single) Wireless Open Access Network (WOAN). In
the latter, government threatens to expropriate spectrum already allocated to
private service providers for the WOAN to use. Government says this would be in
the interest of ‘sharing.’
are the radio frequencies – a finite resource – that mobile operators use to
provide services to consumers, often referred to as “the lifeblood of the
industry.” The more high-demand spectrum a service provider has, the higher the
capacity and better the quality of the service it provides. The Independent
Communications Authority’s (ICASA) recent postponement of its much-awaited
auction of spectrum, was cause for further consternation throughout the
it more difficult for mobile network providers to do business will not lower
prices, even if the government engages in price control. Prices will rise as
service providers attempt to compensate for the new regulatory burden, and,
where the Electronic Communications Act empowers the government to enforce
price control, the quality of service will decline. Investment in our ICT
industry will grind to a halt.
industry is the most viable vehicle for substantive socio-economic
transformation in South Africa, a fact often overlooked. With a 98% mobile
penetration rate across the country and a virtual-100% penetration rate in poor
urban communities, what has been achieved in terms of technological empowerment
is one of South Africa’s greatest success stories.
licensing regime in South Africa is already highly burdensome. Licensing and
spectrum fees are expensive, besides which, service providers are required to
provide discounted data to schools, hospitals, and institutions of higher
learning – a cost ultimately borne by paying consumers.
only the direct cost of government regulation leads to higher prices. When we
had load shedding, for example, service providers had to acquire and maintain
diesel generators and back-up batteries. South Africa’s prospects for
sustainable electricity generation remain bleak.
shelves the new telecoms policy, allows ICASA to allocate spectrum, and
significantly reduces the regulatory burden, South Africa’s premiere
substantive transformative industry can continue to provide pocket-sized means
for life-changing empowerment. Any substantive regulation, as intended in the telecoms
policy, should be put to the test of a Socio Economic Impact Assessment (SEIA) to
determine whether or not any unintended consequences of the policy will harm
the industry, and also be subjected to intense public consultation in good
the case of the telecoms policy, neither an impact assessment nor public consultation
was done appropriately. South Africa is going to be beleaguered by a regulatory
regime, the consequences of which are completely unpredictable (other than the
truism that the consequences will be unintended), that neither the industry nor
the people will fully understand.
The question for government is whether the most important goal we should
strive for is the wellbeing of South Africans or the furtherance of a
particular ideology. Two separate goals that are mutually exclusive.
Comments on Government can and should lower data prices but not by strangling the industry