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SA telecoms Minister vows to slash data prices

SA telecoms Minister vows to slash data prices

Growing discontent in South Africa over high data costs has led to a commitment from the country's government to reduce prices.

Siyabonga Cwele, South Africa's Minister of Telecommunications and Postal Services says he anticipates that the data prices will be reduced before long.

"I strongly believe in the near future they will come down because innovation and the demand in Africa and South Africa in particular for social media is very high and increasing exponentially. All these dictate that those data costs should come down, but also as government we are putting measures to make sure that there is competition in this broadband market. Now we have just issued a policy directive to the the regulator to go and do a study about the competition in this market because that is very critical to bringing down the cost."

The Minister added, "I think generally we have been worried about competition in the broadband market. If you check the cost of calls they have come down significantly - they are almost free now on the internet - but the data costs remain very sticky and people have been complaining. We have been receiving a lot of complaints not only from the youth who are utilising this because of the social media revolution in South Africa, but also from parents. It is out of that concern that we then asked the regulator to do a market study because we had to do things according to the law. Some of the recent courts judgments - as late as last year - agree that we must look at issues because they are critical in order to increase access particularly for the poor."

Minister Cwele adds that the government is aware of the steps taken by smaller operators in South Africa to make data cost more affordable and that they are met with resistance by bigger operators a strange phenomenon.

Lessons from East Africa

Minister Cwele says the government is working closely with counterparts from African countries to find ways to achieve aims set out in the AU's Agenda 2063.

Regional cooperation can resolve standardisation of networks and other factors will lead to a larger market that will be more attractive to investors due to the economics of scale, according to Cwele.

"One of the key issues we have been dealing with in SADC, where regulators complain that we do not have uniform laws, is this thing of roaming costs. They are said to be relatively high and if you check in East Africa where they have taken a decision and implemented "roam like home" in those four or five countries. Telcos feared that their revenue would drop but that was not true because people will speak more when they can afford to do so. Low roaming costs mean that I can call relatives in Lesotho or Swaziland more often which means the volume will increase. We are really saying that we should not think like monopolists as they always constrain volume and keep on increasing price. Volume is a good business case in Africa. If you make communication affordable more people will use it and you will get even better revenue."

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