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SA's #DataMustFall campaign overlooks market realities

SA's #DataMustFall campaign overlooks market realities

As the debate over the high cost of data continues in South Africa, experts have urged consumers to consider that having more people connected to better quality networks on the continent comes at an expense.

According to regional ICT policy and regulation think tank, Research ICT Africa the cheapest rates for 1GB in Africa by country are to be found in Tanzania, followed by Egypt, Mozambique, Uganda and Ghana for the second quarter of 2016.

Dr Alison Gillwald, Executive Director of Research ICT Africa has cautioned against a simplistic assessment of the costs to connect as other factors such as wider access play an important role.

"We do face this real challenge of the high cost of rolling out these new network services and we've seen massive investments by the mobile companies in order to do so. That has produced very high quality networks and very extensive networks in South Africa that do not exist in some of these countries where we have got these low prices. It does exist in some countries where you have better prices than us, but reasonably good penetration and coverage as well. So clearly there is room for South African prices to come down - but we should be careful about just saying that prices have to fall. It is a very fragile ecosystem that has to be very well regulated and we have to see where the bottlenecks are and why prices are very high."

Dr Gillwald's view is the supported by Kevin Lings, Chief Economist at Stanlib who emphasises the urgent need to connect more people to the internet in order to expand access and generate major economic growth and rapid job creation.

Lings cites the Akamai quarterly 'State of the Internet' report which analyses data gathered about broadband adoption, as well as other relevant topics concerning the internet and its usage.

"According to the report, global internet access has increased from 400 million users in the year 2000 to an estimated 3.2 billion users in 2015, and is expanding by roughly 200 million new users every year. In some regions of the world, internet penetration as a percentage of population is extremely high - almost 95%. In South Africa, internet penetration as a percentage of population is a mere 47%."

Dr Gillwald adds that there has been little shift in pricing over the last few years as operators know the margin at which they can get their return on investment. "It is true that the one gigabyte price that is used globally to measure data prices has remained static and that is likely to happen for a while as operators are building infrastructure for next generation networks. They basically have to get return on investment. They know what they have to get per subscriber in order to get decent rates of return and they have very good rates of return in this country that are not completely out of line with other countries. There are other countries where operators unbelievably get even higher rates of return."

Research ICT Africa found 1GB to be most expensive in South Sudan followed by Swaziland, Zimbabwe, Sierra Leone and Mauritania in the second quarter of 2016.

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