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When the Competition Commission (CC) instructed MTN and it’s competitor Vodacom to lower data prices, South Africans breathed a sigh of relief, but it may have been too soon.
MTN Objects Instruction
In a statement, MTN said they
respectfully disagree with the analysis and recommendations contained in the summary report
MTN
They felt the investigation was erroneous, as its main focus was on the way the data prices disadvantages the poor South Africans. The ANC still politely requests from the two mobile giants to willingly reduce data prices until the spectrum allocation is dealt with.
Spectrum Allocation
What is Spectrum
A basic definition for spectrum is radio frequencies used to establish communication between transmitters (towers) and receivers (mobile devices). It is used for all kinds of wireless communication such as WiFi, Bluetooth, mobile telephones, radio, TV etc.
Licences to use certain spectrums are controlled by national regulatory authorities and they need to issue these licences.
South Africa’s Situation
The spectrum allocation is one of the boulders in the road to cheaper data. Godfrey Motsa, MTN South Africa CEO said that regulators and government have – for more than a decade – neglected to release the spectrum needed by the mobile operators to lower data costs.
MTN also noted that South Africa has some of the lowest spectrum allocation compared to other markets. To put it in perspective, let’s use MTN Nigeria as an example. MTN in Nigeria has approximately triple the spectrum it has in South Africa, with 110MHz in Nigeria and 38MHz in South Africa. To put it in numbers, MTN South Africa can cover 58 million people with about 14,000 towers whereas MTN Nigeria can cover almost 200 million people with the same amount of towers because they have more spectrum.
To work around the absence of spectrum, MTN South Africa had to get creative with the little spectrum available to have 4G coverage across the country. It invested more than R50 billion in their network in South Africa alone to compensate for the absence of spectrum. Hence, the high cost of infrastructure is one of the reasons for high data prices.
President Cyril Ramaphosa said the government started a process to release the spectrum that is in such high demand.
Closing
Both Vodacom and MTN will review the CC’s report. Vodacom said it will work with the commissioner and will have more news on the matter when their review process is completed.
Today’s article gives more perspective on the high data prices in South Africa. Read my story on the comparison of data prices with other African countries and the recommendations made by the CC in their report.
