Why Is South Africa Still Waiting For Cheaper Data?

Mobile data prices in South Africa are higher than in many other countries in Africa and elsewhere. The quick release of spectrum could change that – but continued indecision by policymakers leaves consumers with costly data bills and hinders economic growth.

- Mariam Isa

A long-awaited government policy directive has raised more questions than answers for South Africa’s telecommunications industry, and quashed hope for the quick release of spectrum – which existing mobile network operators say would help them to improve their services and cut data costs.

Spectrum refers to the radio frequencies used for communication over airwaves by radio, television and the mobile telephone industry, as well as other wireless applications like Wi-Fi and Bluetooth. It is both a sovereign asset and a limited resource, managed by national regulatory authorities, which issue the licences needed for its use.

However, policy paralysis and mismanagement has blocked the allocation of new spectrum in SA for more than a decade, forcing existing operators to spend more money on repurposing their infrastructure to meet demand.

The indecision has also prevented local television broadcasters from keeping up with digital migration, a global shift in technology that would have released spectrum which the broadcasters now occupy, to mobile operators.

Addressing the scarcity is crucial to the economy, as wider, cheaper and more efficient network coverage would stimulate innovation, create jobs and ease the cost of doing business in South Africa – attracting more investment into the country. But analysts say that the announcement by communications minister Stella Ndabeni-Abrahams on 26 July, while welcome, points to further delays.

The government has decided to allocate much of the country’s unused high-demand spectrum to a Wholesale Open Access Network (WOAN), which will be established through a consortium of companies with diverse ownership.

The intention is to boost competition by opening the market to small- and medium-sized enterprises, favouring black-owned businesses and including the participation of targeted groups including women, young people, and persons with disabilities.