For most of us, the cause for data and airtime costs to be reduced may be motivated by wanting to spend less on our monthly phone bills,.
But for many in rural South Africa, it comes down to choosing between communicating and basic living costs.
This has been highlighted in the report compiled by Parliament’s Portfolio Committee on Telecommunications and Postal Services, following the two-day public hearings on the cost to communicate, held in September.
The report features arguments from all stakeholders who presented at the hearings, as well as observations and recommendations to government, mobile networks and other key players in the debate. The report will only come up for discussion and approval sometime in the new year.
Cost to communicate takes chunk out of monthly income
While data, internet connections and airtime may not account for too much in the income of the average urban households, it can take a large chunk out of those in rural areas, most of which depend on government grants and have few or no people who are employed.
According to a 2015 report on the cost to communicate by Research ICT Africa (RIA) although Government and regulatory interventions have reduced the cost of mobile voice services in South Africa, data costs have generally remained stable, a sharp contrast to data prices in other African countries where there has been a steep decline.
RIA’s 2016 report revealed that for people earning less than R388 a month spend 22% of their disposable income on limited communication products, which include only 7 SMS and 77 minutes of calling time and between 25 – 30MB data a month.
Moreover, 40% of the time, SIM cards owned by these people do not have airtime, making it even more difficult to use those services when they’re needed.
In the area where the research was conducted, MTN was the most popular mobile network with 94% of mobile phone owners being customers.
In general, most respondents were unaware of how much they pay per minute, with only 30% able to report on their SIM cards price plan.
Of the 94% MTN users, 92% use MTN Zone, a pricing plan offering cheaper calls and SMSes with discounts of up to 100%. The plan has a dynamic pricing structure, making it difficult to to assess per-minute costs.
When researched however, MTN Zone was found to be more expensive than other price plans when calculates using data from participants phones.
Knowing how much one pays per minute is crucial as it helps inform customers on how much they’re spending on communication and compare prices with other networks available to them.
Changing to a cheaper mobile network was a challenge for most customers due to long distances and the cost to reach urban centres where portability can be done, and the difficulty to produce the documents (such as IDs and proof of residence) required for this, the report said.
Bread and butter vs airtime and data
“On average low-income consumers spent R85 a month on communication services. This is high as the reported individual monthly income averaged R388 per month, of which 55% is from government social grants,” RIA said.
RIA further explained that 41.2% of the rural customers were sacrificing spending on other items to buy airtime and that of this group, 34.5% cut back spending on essential food items, 16.7% essential items for cooking and electricity and 2.4% for both.
Recommendations to the Minister of Telecoms
Having heard and reviewed the submission from RIA, the Portfolio Committee recommended to the Minister of Telecommunications and Postal Services, Siyabonga Cwele, the following:
- Ensure price transparency by MNOs [mobile network operators] to empower consumers to make informed decisions when choosing service providers
- Ensure that service providers include user guidance and product awareness so they can make informed decisions about buy a product/package that best serves their needs.
The full report is available on Parliament’s website.[Image – CC South African Tourism]