Why Do The Poor Pay More For Data?

The Competition Commission has revealed that low-income mobile data users are inexplicably paying far more for data than those who can afford bigger bundles. We also check out which country has the cheapest and most expensive mobile data in the world - where does South Africa rank?
Jason Snyman
2019-04-29

The Data Services Market Inquiry report, which sets out to establish why the price of mobile data is so high in South Africa, and how we can fix it, was recently released by the Competition Commission to a fair amount of criticism. 

Many have condemned the report as inaccurate and populist, stating that it contains out-dated pricing information and doesn’t take the quality of the network, or the amount network investment into account when comparing data prices. 

Therefore, it could be said that the when it comes to matters of pricing, the report doesn’t really hold much merit. But then, it could also be said that with so many shifting factors to take into account, compiling an up-to-date analysis can be extremely challenging.

There are still some interesting things to learn. Let’s take a look.  

What Can We Learn From The Data Services Market Inquiry Report?

Though most of the report appears to be half-baked, there are still several important things that we can take from these findings.

First off, international benchmarking confirms that the price of data in SA – particularly mobile prepaid data – is, in fact, quite high. This is also confirmed by other data compiled by UK-based Cable, but we’ll get to that in a bit. 

It was also found that MTN and Vodacom charge higher prices in SA than in other countries. MyBroadband took a look at the prices of 30-day data bundles in prominent countries in which these networks operate, and, due to different sizes in bundles available, worked out an average price per GB. As you can see from the tables below, SA is by far the most expensive. 

This could be explained by the fact that MTN and Vodacom both invest far more into South Africa than in those other countries, which does impact the price of data. We pay more for our data because we receive better quality and better coverage, it’s just that simple. 

There’s still a huge difference in per-MB pricing, however, between smaller data bundles and larger data bundles. Using MTN monthly data bundles as an example, you could buy 1GB for R149 or you could buy 3GB for R299. 

It doesn’t take a genius to figure out that something is off about that, and the networks, when probed about this disparity, could not produce any answers.

Those who can afford it will spend the extra money, because they believe that they are now getting better value. Those who can’t afford to lay out the extra money will have to buy smaller bundles, but will inevitably be paying four or five times more per MB. Either way, Big Network gets what it wants, and in the last two weeks, both MTN and Vodacom have been slammed for not caring about the poor.  

The Competition Commission has recommended introducing immediate relief on data pricing.

The Most Expensive Data In Africa

Not only do they have the most expensive petrol in the world, but our neighbours, Zimbabwe, also have the most expensive mobile data in the world. At least, that’s according to data compiled and analysed by UK-based Cable, based on 6 313 mobile data plans in 230 countries from 23 October to 28 November 2018.  

Based on the above information, the average cost of 1 GB was calculated, and then compared from country to country

Howmuch.net produced a visualisation of global mobile data prices to save us from the agony of doing too much reading.

The data shows that Rwanda has the cheapest prices, at just R8.03 per GB, followed by Sudan at R9.75 per GB. The cheapest data in the whole world? India – at only R3.73 per GB.

Behind Zimbabwe, at R1078.20 per GB, Equatorial Guinea had the second most expensive data, at R943.85 per GB.

SA ranked 40th out of the 60 African countries listed in the report, with an average of R103.09 per GB of sweet, sweet data. 

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