[ad_1]
Over the past week, mobile data prices in South Africa have once again taken center stage, with Communications Minister Stella Ndabeni-Abrahams will be in charge of reducing data prices by 50%.
Twitter users also complained about high prepayment costs through the hashtag #NoRechargingForMTNand it was further blamed for stifling the growth of SMEs.
The narrative that “South Africa has some of the most expensive data speeds on the continent” has become so ingrained that it is sacrilege to challenge it.
However, the reality is that this statement is inaccurate as it only applies to select products from select mobile operators.
It’s easy to select specific data products from a South African mobile provider and then compare them to more affordable data products from an international operator.
This is an unfair comparison and does not take into account the overall value proposition that users receive.
If you compare similar products, it quickly becomes clear that we enjoy some of the cheapest mobile data products on the continent.
For example, South Africans can buy unlimited 4G service for their phones for less than R300 per month. We couldn’t find a better deal anywhere in Africa.
Rain’s unlimited 4G for your home or office for R479 per month also offers unbeatable value for money.
South Africa also has some of the lowest prices on big data contracts like 20GB or 50GB per month.
The claim that South Africa has some of the most expensive data speeds in Africa is therefore wrong and even dangerous, as it can lead to undesirable actions by an uninformed government.
Competition and choice
What is often overlooked in mobile data price comparisons is the overall value proposition of a data product.
Network quality and coverage are key components of a mobile data offering and should be considered when comparing prices.
Building a high-quality national network with good coverage costs tens of billions and should require higher fees than a spotty network with mediocre speeds.
The Vodacom and MTN networks are by far the best in Africa thanks to their investments in much larger networks.
Its capital expenditure (Capex) in South Africa dwarfs that of its other African operations.
It is therefore not surprising that Vodacom and MTN charge more for some of their mobile data products in South Africa than in other countries.
Vodacom and MTN also spend more than all their local competitors: Telkom, Cell C and Rain.
This means that the two mobile giants have much higher speeds and better coverage than their competitors.
In turn, lower network investments by smaller operators allow them to be more price competitive to attract the price-sensitive segment of the market.
And this is the beauty of the competition: South African consumers can afford to choose from a range of products with different speeds, coverage and prices.
This is exactly how a free market should work. Businesses must be allowed to create products that they believe people want and then charge what they believe people are willing to pay.
However, what has happened in South Africa is that consumers and politicians are putting pressure on Vodacom and MTN to cut prices.
They want to force the two mobile giants to offer their Ferrari-level data products at Kia-level prices.
What is rarely mentioned is that the best way to force a company to cut prices is by supporting its competitors – vote with your wallet.
If you don’t like Vodacom or MTN pricing, just switch to Rain, Telkom or Cell C. You can even switch to one of the many better priced MVNOs.
If you’re not willing to move, it’s a pen on the edge of Vodacom and MTN for offering such excellent service that you continue to support them when much cheaper products are available.
The notion of regulating mobile data prices is counterproductive and will reduce competition, eliminate consumer choice, and result in lower quality networks.
Here are the facts
With so many opinions on the subject, it is important to consider the facts regarding prices and the quality of the network.
Vodacom’s local and international operations provide an excellent benchmark for mobile pricing and network quality.
The data shows that Vodacom’s prepaid data prices are higher in South Africa than in its other operations.
However, for large data packages, prices in South Africa are much lower than in other countries where Vodacom operates.
The data also shows that Vodacom’s 3G and 4G coverage in South Africa is much better than in any of its other operations.
What is also important to note is that Vodacom has less spectrum in South Africa than in its international operations.
Vodacom network coverage
| Network coverage | |||
| country | 3G coverage | 4G coverage | Average |
| South Africa | 99.8% | 96.4% | 98.1% |
| Lesotho | 98.7% | 84.3% | 91.5% |
| Tanzania | 58.6% | 32.6% | 45.6% |
| Mozambique | 56.1% | 25.2% | 40.7% |
| DRC | 31.4% | 22.0% | 26.7% |
Vodacom Spectrum
| Vodacom Spectrum | |||||
| Spectrum band | Tanzania | Mozambique | DRC | Lesotho | South Africa |
| IMT700 | 2 x 10 MHz | – | – | – | – |
| IMT800 | – | 2 x 10 MHz | – | 2 x 20 MHz | – |
| IMT900 | 2 x 7.5 MHz | 2 x 7.8 MHz | 2 x 6 MHz | 2 x 10 MHz + 2 x 12.2 MHz | 2 x 11 MHz |
| IMT1800 | 2 x 10 MHz | 2 x 20 MHz | 2 x 5.8 MHz + 2 x 12 MHz | 2 x 20 MHz + 2 x 10 MHz | 2 x 12 MHz |
| IMT2100 | 2 x 15 MHz | 2 x 15 MHz | 2 x 10 MHz | 2 x 20 MHz | 2 x 15 MHz |
| IMT2300 | – | – | – | – | – |
| IMT2600 | – | – | – | – | – |
| IMT3500 | 1 x 14 MHz + 1 x 7 MHz + 1 x 14 MHz + 1 x 7 MHz | – | 2 x 15 MHz FDD | 1 x 21 MHz + 1 x 100 MHz | – |
Vodacom data pricing
| Prepaid 7 days | ||
| country | Data | Price |
| Tanzania | 1 GB | R19 |
| Mozambique | 1 GB | R24 |
| Lesotho | 1 GB | R37 |
| South Africa | 1 GB | R80 |
| Mozambique | 2GB | R50 |
| Lesotho | 2GB | R50 |
| South Africa | 2GB | R120 |
| Prepaid 30 days | ||
| Tanzania | 1 GB | R65 |
| South Africa | 1 GB | R99 |
| Mozambique | 5GB | R101 |
| Tanzania | 5GB | R130 |
| South Africa | 5GB | R349 |
| Mozambique | 10GB | R202 |
| Tanzania | 10GB | R227 |
| Lesotho | 10GB | R410 |
| South Africa | 10GB | R469 |
| Tanzania | 20 GB | R324 |
| South Africa | 20 GB | R699 |
| Lesotho | 20 GB | R725 |
| Big Data contracts | ||
| South Africa | 5GB | R129 |
| Mozambique | 5GB | R161 |
| Lesotho | 8GB | R544 |
| South Africa | 10GB | R149 |
| Mozambique | 11 GB | R343 |
| Lesotho | 8GB | R544 |
| South Africa | 20 GB | R199 |
| Mozambique | 20 GB | R606 |
| Lesotho | 20 GB | R919 |
Read Now: Stella Ndabeni-Abrahams ordered to cut mobile data prices in half
[ad_2]
