Data prices likely to remain high, says EFF after spectrum auction ends

The Economic Freedom Fighters (EFF) said there is little hope that data prices will ever fall in South Africa, and the market will continue to be dominated by the big mobile operators.

The Independent Communications Authority of South Africa (Icasa) on Thursday announced the conclusion of the much-anticipated high-demand radio frequency spectrum auction.

The auction involved six qualified bidders which included Cell C, Liquid Intelligent Technologies, MTN, Rain Networks, Telkom, and Vodacom.

Icasa said the revenue collected from the auction totals more than R14.4 billion, which will go to the national fiscus.

“This is the total amount generated from the Opt-In phase auction, which took place on 8 March 2022, and the main auction stage, which commenced on 10 March 2022 and concluded on 17 March and comprised 58 rounds of bidding between the six bidders.”

Vodacom and MTN were the biggest spenders in the auction, coughing up more than R5 billion each for access to the 100MHz and 110MHz bands that will allow them to deploy their 5G services.

Rain and Telkom also emerged as winners of the first bidding round.

The EFF said Icasa lost the opportunity to deal with the lack of effective competition in the mobile market.

“Instead, it entrenched the duopolistic structure of the market for a foreseeable future. There is little hope that data prices will ever fall.

“In the main, the market will continue to be dominated by Vodacom and MTN, both of which left the auction with additional 110MHz and 100MHz respectively.”

“With Vodacom and MTN each spending R5.4 and R5.2 billion, it means all this money will now have to be recovered through the ordinary consumer. In essence, the hope for more competition in the market to force data prices to fall is lost and possibly for good.”

The EFF said while the rolling out of 4G and 5G networks promises high speed quality internet services, the lack of competition will mean data prices will still be extremely high.

“The poor, particularly in rural South Africa, will continue to be excluded from the internet experience which by the way is overtaking all forms of life. The EFF has on several occasions called on government to use the rolling out of spectrum as a means to break monopolies.

“To this extent, the government has dismally failed, taking the short-sighted short-cut to raising money that will probably end up in corruption.”

The EFF also expressed concern with the sudden dropping or postponement of the Wireless Open Access Network (WOAN), saying calls for the review of the WOAN by Communications Minister Khumbudzo Ntshavheni yet again leaves a lot of uncertainty in the market.

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