South Africa’s mobile network operators should reduce data prices by launching genuine wholesale service offerings. Embracing the open access spirit of the new National Integrated ICT Policy White Paper will enable greater mobile broadband competition on terms more acceptable to the incumbents.
“The operators have a window of opportunity to open their networks by introducing real competition in their downstream markets. A competitive wholesale mobile data model will help them avoid more unpalatable consequences,” said Dominic Cull, regulatory advisor to South Africa’s Internet Service Providers’ Association (ISPA).
Government’s recently released National Integrated ICT Policy White Paper identifies open access and service-level competition as key drivers for South Africa’s digital future. Radical proposals around mobile broadband spectrum mean there is a clear time frame for incumbent mobile networks to embrace greater sharing and transparency.
“In doing so they can look to the precedent established by Telkom, which has embraced findings against it by the Competition Authorities for anti-competitive conduct by hardening the separation between its wholesale (now OpenServe) and retail divisions. This separation – which is not evident amongst the mobile networks – ensures that OpenServe does not unfairly discriminate between Telkom Retail and third party ISPs in terms of price or quality of service.” Wholesale is a profitable business area for telecoms operators, with solid margins, and merits proper and separate attention.
ISPA has repeatedly called for the mobile network operators to take bold action to bring down the costs of mobile broadband by introducing competitive wholesale mobile data products, raising the matter again in recent Parliamentary hearings into the cost to communicate. ISPA argued then that the absence of a wholesale mobile data offering constitutes a lost business opportunity for mobile operators and an obstacle to deepening broadband penetration.
“Enabling competition downstream from Telkom has borne fruit, with strong competition between Internet service providers driving innovation and reduced pricing, leading to better packages for consumers. As a result, uncapped ADSL or large, unshaped capped ADSL accounts have become the standard in the fixed-line broadband market. New fixed fibre offerings offered on an open access basis are driving the price of fixed data even further.
“This reduction in prices in the fixed broadband space – available only to a small percentage of South Africans – through service level competition must be replicated in the mobile broadband market. This is the clear message from the White Paper,” concludes Mr Cull.
Published: Monday, November 7th, 2016
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