ISPA Calls for Swift Action on High Mobile Broadband Costs

3 July 2013

The Internet Service Providers’ Association of SA (ISPA) has called for the Independent Communications Authority of South Africa (ICASA) to act decisively to increase short-term broadband penetration by promoting greater competition within the mobile data market.

ISPA’s call is made within the context of the launch of ICASA’s Cost to Communicate Programme.

Government, the private sector and academia find themselves in rare accord when it comes to the social and economic benefits of broadband. It’s also clear that given the wide penetration of mobile that mobile broadband is going to offer the best option for bridging the affordability gap which is the primary barrier to greater uptake and greater use of broadband in the short-to-medium term.

According to research by the GSM Association, 66 percent of South Africans are subscribers to mobile services. (This figure is lower than many others cited for mobile penetration because it

filters out multiple SIM card use by lower income users taking advantage of special offers.)
However, despite this relatively high rate of access to mobile services, the 2011 Census revealed that 65 percent of households did not have access to the Internet. Of the 35 percent that do have access to the Internet, nearly half (16 percent) used mobile phones to connect.

Worldwide, the trend is for Internet access to be obtained via mobile devices. One study by PWC predicts that global spending on Internet access via mobile devices will exceed fixed broadband by 2014. Many other studies make the same prediction.

Here in South Africa, the major networks claim to cover roughly 80 percent of the country and around 90 percent of the population.

“The reality is that the mobile networks already provide the ability to access broadband services. Physical access is not the barrier for the majority of the underserved: affordability of the services accessed is,” says ISPA regulatory advisor Dominic Cull. “Multiple studies, such as those cited in ICASA’s Cost to Communicate Programme, conclude that South Africans simply pay too much for mobile data connectivity. If Government is serious about using broadband as a catalyst for growth, then it must use its policy, legislative and regulatory powers to open this space up for competition and bring the prices down.”

Cull continued that this was an approach which had clearly worked in the fixed line environment and this success needed to be transferred into the mobile data market: “It is hardly rocket science to figure out where the most effective short-term intervention would be.”