Mobile Network Operators (MNOs) are not responding effectively to growing calls for a reduction of the cost to communicate according to Telkom CEO Sipho Maseko.

Maseko shared his take on #DataMustFall and associated campaigns on the sidelines of the 3rd meeting of the CEOs Broadband Initiative for Southern Africa held in Cape Town late last week.

"There is a movement around reducing the cost to communicate and my view is that the telecommunications companies have not managed that propaganda very well because when everybody talks about reducing the cost to communicate the eyes tend to get fixed on us, when in fact the ecosystem of the cost to communicate is not just about the activity itself - it is the price of devices, applications and other services that are there. I don't think there has been a holistic approach to it and as telecommunications providers we really need to apply our minds so that we are not the ones that get the short end of that stick. Device prices go up whenever a new one is launched but the cost of the megabyte is coming down all the time. Traditionally each time people talk about access we are the ones that get blamed. There should be a way for us to work more closely with OEMs."

Maseko says MNOs need to collaborate in areas such as procurement in order to make the burden of investment and job creation in a strained economy more bearable. He believes a concerted approach would be useful for all players although smaller mobile network operators, including Telkom Mobile, would benefit the most.

"I think it is not just about branded devices. Pricing is one thing and there is a lot of procurement power that can be leveraged to open up the market. Another route is exploring things like consignment stock which is enabling them to put devices on our shelves and e-platforms, but we don't have to pay and they only get the cash when the customer pays. It will be a combination of factors. The more you democratise access, the more you can bring cost down. There also needs to be more competition. One of the problems we have had in South Africa - especially on the mobile side, is that it is a sort of two-and-a-half player market and that has allowed them to have a grip on prices. Cell C and ourselves have begun to innovate around products and services that drive competition which brings prices down. High prices are seductive and sometimes you can get used to them to your own detriment as you don't take out inefficiencies and people migrate to other platforms."

Reducing energy consumption

Suraya Hamdulay, Vodacom's Executive Head for Corporate Citizenship agrees that innovative ways to keep costs down and increase access should be prioritised.

She cited the company's solar-powered sites as one of the ways to achieve efficiencies that can help to reduce costs for the consumer.

"When it comes to connecting more communities successfully from a commercial perspective we are saying if you are innovative and driven enough to connect these communities, you will find a way to do this. In the DRC we've got more than 800 ultra solar sites. These sites cost thirty percent less than a normal conventional base station, they take three to four days to deploy and they are low cost. They are off the electricity grid and are cost effective. We have deployed four of them in Lesotho just last year. In Mozambique we have a 120 solar sites. It goes beyond green and it is about connecting rural communities that are excluded. This is about access to education, health services and information."

Hamdulay says while the solar projects are a Vodacom solution, their technology partners share the duty to keep costs at a minimum. "We may not be getting the ARPU that we want out of it, but the greater social good is much more important."

Henrik Linnet, Head of Network Product Solutions for Ericsson in Sub-Saharan Africa, agrees that reducing the production cost of mobile broadband is impacted by the power consumed by equipment used to run a network in the initial stages as well as for daily operations.

He says energy consumption through software and and product design can reduce production costs by up to 40% or more. Ericsson has entered into a partnership with Mediatek that they announced last week to make LTE -Advanced features available in mainstream mobile devices across Africa.

"We want to provide mobile broadband to more of the population. Today twenty percent of the population in Sub Saharan Africa have access to the internet. The target according to the ITU is to get to to fifty percent in 2020. So we have a huge gap. For all developing markets in total it is seven hundred million new internet users that have to be connected over the next four years, and a large portion of those are in Sub-Saharan Africa. We expect majority of them to be mobile broadband subscribers. The accessibility of devices with a lower prices is very important, but the demand on the networks will increase and we have to be prepared with the infrastructure and then we come into the operational costs and production costs and the speed required to roll this out. It is an ecosystem of the operators, us as vendors and the device manufacturers."

Brahima Sanou, Director of the ITU Telecommunication Development Bureau recommends that regulators be included in a multi stakeholder approach to reducing the cost to communicate.

"We should also consider the cost chain starting with the investment and go down by comparing likes with likes. The cost of infrastructure means that you can only get the price down to a certain level for the sector to remain profitable for the investors. The regulator must play its part in the ecosystem, but you have others like Ministers of Finance for example when it comes to duties on the equipment. All these need to be put together including increased utilisation by ensuring mass utilisation through the roll out of tablets in schools. We have to look at it as an ecosystem and strike a balance on all the elements that influence the cost."