Portfolio Committee hearings on Cost to Communicate

[5 November 2017] The DTPS presented on the cost to communicate before the Telecommunications and Postal Services Portfolio Committee on 31 December 2017. A presentation on data pricing trends was also made by Research ICT Africa.

DTPS presentation on Cost to Communicate 31 October 2017

Research ICT Africa presentation on Cost to Communicate 31 October 2017

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[27 September 2016] Below are links to submissions and presentations made:

Alliance for Affordable Internet

Alternatives for Affordable Communications in rural South Africa Innovative regulatory responses to increase affordable rural access

Cell C

CSIR

DTPS

ISPA – presentation

ISPA – submission

ICASA

MTN

Neotel – presentation

Neotel submission

Research ICT Africa

Right 2 Know – Alternatives to Privatisation

Right 2 Know – Lived Costs of Communication

Right 2 Know – submission

Telkom

Vodacom

WAPA

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[27 September 2016] The below update on the state of the prepaid mobile market in South Africa – presented by Research ICT Africa – provides a useful context for the current debate around the cost of mobile data in South Africa:

 

  • Vodacom, MTN and Cell C are competing more and more on customised products for all subscribers instead of strict service pricing.
  • Telkom fails to exert pressure on other operators despite undercutting competitor’s voice tariffs and monthly data prices.
  • Cell C’s strategy to champion best-value products, cheapest voice and SMS products, and subsidising an exclusive zero-rating strategy with a global social networking platform makes it the leader of the prepaid pack.
  • Customised products from service providers may result in reduced cost of communication but this requires high levels of consumer awareness to check the terms and conditions of such services which may have time or product limitations.

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[18 September 2016] Below is a link to the programme for the hearings:

Final Programme on cost to communicate

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[8 September 2016] This process is being picked up again at very short notice, with the Portfolio Committee on Telecommunications and Postal Services sending out invitations today for interested parties to make written and oral representations on the cost to communicate in South Africa.

Advert for public hearings on cost to communicate

Written submissions are due by 12h00 on 13 September and the hearings will take place on 20 and 21 September 2016.

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[12 February 2014] The Portfolio Committee on Communications adopted its final report on the hearings into the cost to communicate in South Africa on 4 February 2014.

Report of PPCC Public Hearings on Cost to Communicate

Consolidated Public Hearings Submissions Matrix

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[15 July 2013] The Parliamentary Portfolio Committee on Communications has just sent out notice that it is to hold public hearings on the cost to communicate in Gauteng next week. No venue has been announced as yet. It is unfortunate that the ability of the public and industry to participate in these hearings will be limited by the ridiculously late notice given…

Public Hearings on “General Cost to Communicate” in Gauteng 22-26 July 2013

The Portfolio Committee on Communications will embark on public hearings on “the general cost to communicate in South Africa”, from 22 – 26 July 2013 in Gauteng province. The Committee has recognised that, despite reduced mobile termination rates (MTRs), the cost of communication in South Africa is still high and competition remains fragmented.

The Committee has previously held public hearings on the general cost to communicate in Parliament on 29 – 30 November 2013. The hearings specifically targeted the Department of Communications as the policy maker, the Independent Communications Authority of South Africa (ICASA) as the regulator, as well as dominant mobile and fixed-line players in the telecommunications section in the country (Cell C, Vodacom, MTN, Neotel, TelkomSA, and 8ta).

The second phase will include all role players in the telecommunications sector value chain including the Small Micro and Medium Enterprises (SMMEs), Academia, Non-Government Organizations (NGOs) and political parties.

In order to participate, you are invited to make a written submission to the Committee and the submission must reach the office of the Committee Secretary on or before Thursday, 18 July 2013. Please indicate if you would like to make an oral presentation to the Committee.

The programme for the hearings will only be available once all submissions have been received and people or institutions have indicated that they would be making oral presentations.

Email submissions to Committee Secretary, Mr Thembinkosi Ngoma, at tngoma@parliament.gov.za

Enquiries: Mr Ngoma 0214033733 / 0837098407

 

Further information is set out in an accompanying notice:

PUBLIC HEARING NOTICE

Notice is hereby given of public hearings to be held by the Portfolio Committee on Communications (the Committee).

 

ROLE OF PARLIAMENT COMMITTEES

Parliamentary Committees are established as instruments of the Houses in terms of the Constitution to facilitate oversight and monitor the government.

These Committees are the “engine rooms” of Parliament’s oversight and legislative work.

Committees scrutinise legislation, oversee government action, and interact with the public.

One of the most important aspects of the oversight function is the consideration by Committees of Annual Reports and Budgets of organs of State, and reports of the Auditor-General.

Depending on the purpose of the oversight, the Committee will either request a briefing from the organ of State or visit it for fact-finding.
INTRODUCTION

The Committee will from 23rd – 26th July 2013 embark on the first leg of the Public Hearings in Gauteng Province (on the general cost to communicate in South Africa). The next leg will be held in the Eastern Cape Province from the 29th July to 30th July 2013. The third public hearings will be held in the KwaZulu-Natal Province from 31st July to 2nd August 2013.

This is the second phase of the public hearings following the November 29-30 2012, held in Parliament which specifically targeted the Department of Communications (the Department) as the Policy maker, the Independent Communications Authority of South Africa (ICASA), as the regulator, as well as the dominant mobile and fixed-line players in the telecommunications sector in the country (Cell C, Vodacom, 8ta and MTN).

The second phase will see the Committee embark on an identical Public Hearing on the general cost to communicate in South Africa but will include all role players in the telecommunications sector value chain including Small Micro and Medium Enterprises (SMME’s).

 

BACKGROUND

During the Budget Vote Debate of the Department of Communications in Parliament, , the Chairperson of the Committee noted the following:

“I am fully aware that some of our operators are disputing the fact that our communications cost are too high. To this end, the Committee will be embarking on Public Hearings on the impact of the call termination rate before end of June 2012. Furthermore these hearings will not be limited to the call termination rate but will in generally include the cost to communicate in the entire communication sector”. [Hon Eric Kholwane, Debate on Communications Budget, 8 May 2012].

“Broadband Internet is improving the lives of people in developing nations and facilitates access to economic opportunities and social welfare that were previously inaccessible to the poor (ITU, 2012c). For example, mobile broadband has been driving financial inclusion through mobile banking and mobile money in Africa, and it supports new ways of delivering healthcare in many developing nations (ITU, 2012c)

Broadband penetration is a key government programme with a 2020 target of 100% penetration by 2020.

It is because of its economic value add that the South African government has identified it as a key infrastructural investment for the country;broadband generally improves the productivity of business, supports the creation of new products and services and thereby improve the quality of life of all citizens who can actively participate in the new  economy. It is widely reported that the cost of communication is still too high in South Africa and this is  mainly due to a lack of competition in the market. The Committee has on several instances been advised to exercise its oversight role and to engage all electronic communication network and service licensees to determine this fact. The Committee is meant to believe that by dropping barriers to entry in the market will make it easy for investors to come into the market. Instead of trying to prevent monopolies’ exploitation, market should be left to operate and competition thrives.

The telecommunications industry is the central nervous system of an economy as it connects all parts of the network and rapidly shares vital information between its connections. It connects users to one another and to information, which is critical to the operation of every society. It is hard to imagine how a country without a robust telecommunications sector with high cost to communicate can stay competitive in the global economy. Therefore, the most important features of business and society are ensuring that the country implements measures geared towards reducing cost to communicate. Cost-based pricing is a market remedy that will begin to reduce the costs of calls,” ICASA says. Is there scientific evidence that this is happening? It must be recognised that while the quality of the infrastructure and speed of the connection are crucial issues, however, in South Africa one of the main concerns remain price.

Last month, ICASA revealed the Cost to Communicate programme to media and industry, at its offices, in Sandton. Broadly the fast-tracked programme includes undertaking a broadband value-chain study, a call termination market review, finalising the long-awaited local-loop unbundling (LLU) regulations, collecting and analysing of ICT indicators, and establishing a wholesale transmission services digital terrestrial television (DTT) rate card.

ICASA recognises that, despite reduced mobile termination rates (MTRs), the cost of communication in South Africa was still high and competition remains fragmented.

Evidence presented by ICASA point to South Africa been ranked 117 out of 140 countries in terms of mobile tariffs. Of 34 African countries surveyed, the nation was placed at 30 with an average call cost a minute of $0.51, ahead of only Malawi, Chad, the Seychelles and Lesotho. South Africa also achieved a ranking of 9 when compared with 12 Southern African Development Community countries, (Engineering News, 2013)

 

SOME KEY STATISTICS

According to the International Telecommunications Union (ITU), although there has been progress in terms of affordability of broadband services,[1] high prices remain a barrier to accessing telecommunications service and are often a key indicator of lack of competition in African markets.[2] The ITU estimates that in 2011 the price of fixed broadband access cost less than 2% of the average monthly income in 49 countries, mostly in the developed world. Conversely, in 18 of the least developed countries the price of broadband exceeded the average monthly income (ITU, 2012c).

Furthermore, South Africa demonstrates considerable progress (18.7% increase in Internet usage between 2007/08 and 2011/12 research periods) in the number of individuals (15 yrs +) that use the Internet, but this progress is still largely undermined by the high costs associated with communication services, (RIA, 2011/12). Hence the need to address the cost issues for communication, in order to guarantee that our citizens are not disadvantaged in accessing communication services because of high costs.

The Committee acknowledges and appreciates the intervention by ICASA to reduce the interconnection rate. However, compared with other emerging economies in the African continent and abroad, cost to communicate in South Africa still remains high despite the obvious progressive developments in terms of Internet penetration rate which among all the countries under investigation, South Africa has highest with 33.7% of the population aged 15 years or older using the Internet, (RIA, 2011/12).

The Committee is fully aware of the contentions relating to affordability of the cost to communicate in South Africa. Therefore the Committee will be embarking on Public Hearings on the impact of the cost to communicate on the general public and SMME’s. Furthermore, these hearings will seek to holistically evaluate the entire value chain associated with the cost to communication order to further make necessary legislative, policy and regulatory interventions to bring the cost to communicate to affordable prices..

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[1] The ITU (2012) reports that between 2008 and 2009, 125 countries worldwide saw a reduction in access prices, some by as much as 80%. Since 2012, tariffs of fixed broadband have fallen by 52.2% on average and mobile broadband prices by 22%.

[2] See for example Calandro, Gillwald, Moyo, Stork (2010) or Gillwald and Stork (2012)

2017-11-05T13:28:02+00:00November 5th, 2017|competition, Consumer Affairs, snippets|