Telecommunications giant Vodacom plans to reduce its data costs and embark on a programme to enable digital inclusion over the next two years, after reaching an agreement with South Africa’s Competition Commission.
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 on several of its recommendations to bring down the high cost of communication serivces in the country.
The report followed a lengthy data services market inquiry, which identified a series of 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,” says Vodacom Group CEO Shameel Joosub.
Rival telecommunications groups MTN and Telkom are expected to follow suit with their own proposals within the next few weeks.
“We are talking to all of them and [talks] are quite advanced in reaching agreements with both MTN and Telkom. I am hopeful that we will conclude this soon,” said Competition Commission head Tembinkosi Bonakele.
MTN president and CEO Rob Shuter notes that the company has had constructive engagements with the commission, and, while it does not necessarily agree with the report and recommendations, MTN is committed to dialogue and is already on a journey of price transformation and making data more affordable across the group.Close to an Agreement
“We are very close to coming to an agreement. We are very close to coming up with a set of undertakings that would suit both them and [the commission]. I think we have made good progress and we will have good news for our customers in the very near future,” Shuter assures.
The agreement was welcomed by Trade, Industry and Competition Minister Ebrahim Patel, the Independent Communications Authority of South Africa (Icasa) and the Ministry of Communications and Digital Technologies.
“The 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 (4IR),” says Communications and Digital Technologies Minister Stella Ndabeni-Abrahams.
The terms of the agreement, subject to confirmation from the Competition Tribunal, will result in the introduction of price reductions across all 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, Facebook Flex and 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 education and 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.
Zero-Rated Access 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 officially relaunch the Connect U platform 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.
“Having heard the concerns raised by the Competition Commission, we proactively entered into a social contract with government and the public,” Joosub says, pointing out, however, that delays in assigning spectrum and completing digital migration have curbed the pace at which data prices could have fallen.
“We make this call proactively in the hope that spectrum will be allocated this year, as a lack of spectrum impacts price,” he continues, adding that he believes that spectrum will be released this year.
“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 use and demand for data for personal or business use,” explains Ndabeni-Abrahams.
This means that network operators will need more capacity and spectrum to meet demand and facilitate the consumption of the free offerings and zero-rated data services.
Icasa will ensure that it meets the timelines it has committed to in ensuring the completion of the spectrum licensing, she assures.
“It is our considered 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 4IR,” says Icasa acting chairperson Dr Keabetswe Modimoeng.
The spectrum auction will take place by the end of the year; however, the licensing of the Wireless Open Access Network, or Woan, will be concluded in 2021.