The Competition Commission recently launched a provisional file on its inquiry into South Africa’s records offerings market.
Sadly, the document relies on inaccurate or cherry-picked records, leading the Commission to make fallacious conclusions. It also led the Commission to indicate potentially disastrous interventions in what’s a competitive market.
It can be an unpopular opinion, however, we’ve got a wonderful amount of preference when it comes to cell offerings in South Africa. Not simplest in a service company, however in merchandise as well.
That doesn’t mean fees can’t and shouldn’t come down, but populist nonsense has clouded affordable dialogue of the way to make that take place without being self-defeating.
Vodacom and MTN are not keeping a gun to all and sundry’s head. What stops you from choosing Cell C or Telkom Mobile as your cellular community operator? Why have you ever no longer considered Afrihost Mobile or FNB Connect as your cell provider?
I, for one, am a broadly speaking-satisfied Telkom Mobile customer. I have additionally had the opportunity to tour massive elements of South Africa inside the past years to test the pleasant of South Africa’s cell facts networks.
Where Telkom does not have its very own network, I’m normally able to join through its roaming companion. (Telkom is busy switching from MTN to Vodacom as its roaming companion.)
Don’t get me wrong — selecting a smaller operator does lead to occasional frustration.
That’s the exchange you’re making, and which quite few South Africans look like willing to make. You can get many inexpensive charges and extra customer-pleasant offerings, however in exchange for a few reliability, stability, and correct customer support.
Beware unintended effects
It is clear from the solutions the Competition Commission indicates that, notwithstanding its inquiry, it clearly has now not gained an understanding of cellular networking.
One of the key suggestions the Commission makes to offer instant fee relief for South Africa’s poorest is to lessen the in step with-megabyte price of smaller bundles – the ones beneath 1GB.
It suggests: “A dedication through mobile operators to reduce the rate of sub 1GB bundles within an objectively justifiable and socially defensible range of the 1GB charge, provisionally a maximum of 25% higher on an in step with MB basis.”
While this could sound exquisite, if implemented it will maximum probably backfire spectacularly.
South Africa’s economic climate has now not been the type to our mobile community operators, with Vodacom currently posting a decline in cellular facts revenue boom regardless of a 41.Four% growth in information site visitors on its South African network. It could be very hard for Vodacom to justify records rate cuts to shareholders given its modern circumstances.
Cell C is not faring well financially both and is dragging down the share rate of parent organization Blue Label. It has a plan in place to grow to be financially sustainable, a massive part of that copes with the Buffet Consortium.
Given the cutting-edge financial weather, it’s far not going that mobile network operators will without a doubt lessen the rate of their smaller bundles to be inside 25% of the price of their 1GB bundles.
What is much more likely is that networks will hike charges on large bundles to bring them in-line with the Competition Commission’s 25% requirement. Smaller bundles may also see a moderate decrease in fee, but no longer to the extent, the Commission is hoping for.
The Competition Commission need to don’t forget the unintended outcomes of looking to manage the retail fee of data inside the manner it’s far suggesting.
Network congestion manipulate with pricing
A vital issue the Competition Commission does now not appear to consider in the context of pricing is community potential.
Data expenses aren’t simplest a characteristic of fees, however additionally potential planning.
It’s an unpopular component to mention, that’s why you don’t frequently listen networks speaking approximately it, however, in case you make data too cheap, the spike in utilization should place too much pressure on your network.
This will purpose terrible speeds throughout some or all the network, with towers being absolutely beaten by using the call for.
This phenomenon has been proven typically while wi-fi network providers try to launch uncapped cell information services or deliver away loose records as part of a promotion.
Telkom and Rain are two networks that most these days tried to launch affordable uncapped LTE offerings on their networks.
The final results are always equal. Shortly after launching uncapped LTE offerings, subscribers begin complaining about poor speeds. Networks put into effect stricter fair use rules, main to any other wave of court cases.
Sales of the uncapped product are halted and subsequently, a sort of consistent-kingdom is done. If not anything is going too terribly wrong, the network and the provider survives, but with restrictions in the region.
