10 March 2020
Communications & Digital Technologies Ministry and ICASA welcome steps taken by the Competition Commission to facilitate data prices reduction at the retail level of the market
The Ministry of Communications & Digital Technologies and the Independent Communications Authority of South Africa (ICASA) welcome the announcement and agreement reached between the Competition Commission and Vodacom in ensuring that the cost of data is reduced, thereby aligning our common interest and mandate of affordable cost of communication for all South Africans.
This announcement comes at an opportune time as ICASA is currently undertaking two critical regulatory processes that have a bearing on the pricing of data services in the medium term i.e. the licensing of the International Mobile Telephony (IMT), also known as high demand spectrum as well as an inquiry into mobile broadband service markets.
One of the expected consequences of the undertaking to reduce data prices as per the terms of the settlement reached is that it will stimulate demand by consumers. As a result, a lot more people will find it easier to communicate using the service while others will increase their usage and demand for data for personal or business use.
This therefore means that network operators will need more capacity and/or spectrum to meet the demand and to facilitate the consumption of the free offerings and/or zero-rated data services. ICASA will ensure that it meets its timelines it has committed to in ensuring the completion of the spectrum licensing following submissions to the Information Memorandum – the process that paved the way towards this licensing process.
“Today’s announcement is an important milestone in our quest to ensure that data prices are affordable for the majority of South Africans as this is a key driver for the Fourth Industrial Revolution. In July 2019, we issued the Policy on High Demand Spectrum which culminated in ICASA kick-starting the licensing process,” says Minister Stella Ndabeni-Abrahams.
“It is our concerted view as a regulator that the licensing of high demand spectrum is one of the critical components that will facilitate deployment of digital infrastructure as well as building an inclusive digital society, with the goal of ensuring that all South Africans participate meaningfully in the opportunities emanating from the Fourth Industrial Revolution”, says ICASA Acting Chairperson, Dr. Keabetswe Modimoeng.
The spectrum auction will take place by no later than the end of the year (2020) as announced by the President during the State of the Nation Address (SONA). However, the licensing of the Wireless Open Access Network (WOAN) will be concluded in 2021.
With regards to the Mobile Broadband Services Market, the settlement facilitated by the Commission is aimed at providing immediate relief to consumers in respect of the retail prices to ensure consumers pay the rates that are affordable. However, the discussion document issued by ICASA notes that there are structural problems in the wholesale layer of the data services market. ICASA would therefore like to specifically address that layer and intervene as it has a regulatory mandate to protect consumers against unfair business practice and ineffective competition in this regard.
This process will address challenges at the wholesale layer specifically as it relates to, among others, national roaming, site access and competition matters including barriers to entry, etc. These measures are in line with the policy prescripts to promote effective competition and to facilitate entry by new players in the market whilst also advancing the transformation agenda within the Information and Communications Technology (ICT) sector, while stimulating economic growth.
The Draft Regulations on Mobile Broadband Services Market will be released by July 2020 for public consultation and completed by the end of the financial year.
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