As anyone who has ever bought a mobile data bundle will know, data is outrageously expensive in South Africa. The #DataMustFall movement has been around since 2016, calling for a change to the unaffordably high price of mobile data. The Competition Commission (CompCom) announced an inquiry into data prices in August 2017, and that inquiry officially started yesterday. The inquiry will look at the data services sector and whether anti-competitive behaviour by big companies is keeping the price of data high.

What is being investigated? 

In South Africa, the poor pay more for data: up to 11 times more than higher income users. The main questions are the causes for the high price of data, and the impact of these prices on “lower income customers, rural customers, small businesses and the unemployed”. Amandla.mobi has called this a “poverty premium” on mobile data, arguing that high mobile data prices disproportionately impact the poor. Public hearings are currently taking place (17-19 October), and the group gave its submission at the CompCom’s inquiry in Pretoria yesterday.

How and why do the poor pay more? 

Users with limited income may only be able to buy tiny bundles at a time. But the smaller the bundle, the more you pay. For example, if you buy 100MB of data at R29 ten times, you will pay R290 for 1GB of data. But if you buy a 1GB bundle of data straight up, you will pay R149 – that’s R150 less than the low-income user buying small bundles.

So users who have the cash flow to buy bigger bundles get much cheaper rates, and users who don’t, pay much more. If you buy a 5GB bundle, it costs R405. If you bought that data using 100MB bundles over time, you would pay R1 450.

Amandla.mobi’s executive director, Koketso Moeti explains: 

“The highly connected have to a competitive market of mobile networks, fixed-line and fibre networks, and a variety of internet service providers (ISPs). The less connected, who are low-income consumers making up the majority of the population, are largely or solely dependent on mobile network operators for their access … Mobile network operators use price discrimination, charging more for small data bundles. The poor pay a ‘poverty premium’ at rates that are up to 11 times higher than those charged to higher income users who can afford to buy large data bundles”.

At the University of the Witwatersrand, Moeti and director of JamLab Indra de Lanerolle presented findings on how low income consumers use data. The scarcity of data limited people’s use of the internet and the benefits thereof (which is what is behind the argument that internet access should be a human right).

“The fragility of their connections and the frugality of their mobile practices mean their communications are largely restricted to close social networks. People tend to use WhatsApp or Facebook and belong to messaging groups of family, friends and church groups. They rarely explore the broader landscapes of the World Wide Web to search for information (on Google or YouTube, for example) or to visit national news sites.”

DataMustFall: What must change? 

Moeti and De Lanerolle are calling for the regulation of the spread of pricing between small and large data bundles, as well as between contract and prepaid customers. They are also calling for the abolition of out-of-bundle pricing and for the development of a new, affordable, more accessible price model.

#DataMustFall! Stay tuned for updates and more information on how the outcomes of the commission could affect you.