Telecommunications giant Vodacom has reached an agreement with South Africa's Competition Commission that will result in it reducing its prepaid data prices by 40% and enable digital inclusion over the next two years.
Following the publication of the commission’s ‘Final Findings and Recommendations of the Data Services Market Inquiry’ report late last year, telecommunications companies entered into talks with the commission over several of its recommendations to bring down the high cost of communications in the country.
The report followed a lengthy data services market inquiry which identified a series of final immediate and intermediate recommendations to address the high cost of data across the value chain.
“Following the release of the commission’s Final Data Market Inquiry Report in December last year, Vodacom decided to engage constructively with the commission on the issues arising from the report,” said Vodacom Group CEO Shameel Joosub.
Rival telecommunications groups MTN and Telkom are expected to follow suit within the next two weeks with their own proposals.
“We are talking to all of them and we are quite advanced in reaching agreements with both MTN and Telkom. I am hopeful that we will conclude this soon,” said Commissioner Tembinkosi Bonakele.
The agreement was welcomed by Trade and Industry Minister Ebrahim Patel, the Independent Communications Authority of South Africa and the Ministry of Communications and Digital Technologies.
“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,” said Minister Stella Ndabeni-Abrahams in a statement post the media briefing.
The terms of the agreement, subject to confirmation from the Competition Tribunal, will result in the introduction of price reductions across all of Vodacom’s monthly bundles and provide free access to basic Internet, essential services and cheaper pricing to the poorest communities.
Effective April 1, Vodacom will reduce the headline data prices of its 30-day 1 GB bundles by 34% from R149 to R99 on all channels, while “significant” discounts will be provided on all 30-day bundles.
The company will also direct further, personalised discounted bundle offers to prepaid customers in more than 2 000 suburbs and villages where most of the population have income levels below the upper bound food poverty line.
Further decreases will be effected on April 1, 2021, bringing the reductions to about 40% overall.
In addition, Vodacom is extending its current zero-rating data services to incorporate more essential State and emergency sites, with the new essential services aimed at social upliftment consolidated into a single platform called “Connect U”.
The platform will include free access to job portals, free access to Facebook Flex, free access to other essential information such as local and international headlines, trends and the weather and the allocation of two free SMSes a day for active prepaid customers.
Vodacom’s zero-rating offering will be expanded to all public universities, technical and vocational educational training colleges and all public schools across the country that apply to get their portals zero-rated, while expansion plans are under way for Vodacom’s current Mum & Baby offering to provide holistic health information across all life-stages from the third quarter of this year.
The agreement also includes a full zero-rated Internet search function that allows customers access to the entire Wikipedia database of knowledge free of charge.
The platform will also enable zero-rated access to select government sites to assist members of the public in accessing government services such as ambulance services, educational sites and government communication services.
The list extends to more than 20 sites, including the departments of Health, Education and Home Affairs.
Vodacom will relaunch the Connect U platform officially with the necessary marketing campaigns to drive awareness and education.
The range of initiatives, which will be phased in over two months to allow time for the necessary technical testing and implementation, will result in additional savings for customers of about R2.7-billion.
Bonakele said Vodacom was now required to improve customer awareness of the personalised price promotions, including information on the savings that consumers can make from taking up the promotional offers.
“It will also be easier for consumers to find these promotional offers by creating a single landing page for all promotional offers on the Vodacom app and website,” he said, adding that price transparency was also a priority.
“[Vodacom should] display the cents per megabyte for all data bundles offered in relevant channels. This will greatly improve the ability of consumers to compare the value offered across the different packages and make more informed decisions.”
In addition, the telecommunications group should enable prepaid consumers to access detailed information on their historic purchases and what their data was used on, which will also greatly improve transparency and allow more informed decision-making, he concluded.