The recent auction of high demand spectrum for mobile telecommunications will result in data prices falling in South Africa, President Cyril Ramaphosa has said.
Writing in his weekly letter to the nation on Tuesday (22 March), Ramaphosa hailed the auction as a “significant milestone in our reform agenda,” adding that it will drive growth and transformation in the economy.
Data prices will fall after spectrum auction
“The spectrum release is expected to reduce the cost of mobile data, expand network reach to rural and outlying areas, and improve network quality,” the President said.
“Every South African who uses a mobile device will feel the benefits of this reform, especially the poor and those who currently don’t access the internet due to high costs or a lack of coverage.”
In 2019, a Competition Commission market inquiry found that data prices in South Africa were too high and reflected a “bias against the poor.” It recommended decreases of up to 30-50 percent.
Echoing these findings, Ramaphosa added, “Expanding digital access is critical for economic growth. Cheaper data means that young people will have greater access to digital platforms to seek job opportunities online. Students will be able to access information and educational materials. Entrepreneurs will be able to start businesses and reach new markets.
“Equally, the availability of this spectrum will contribute to economic transformation. It will allow many more people, especially those from remote areas and poor communities, to access digital resources and will improve their ability to participate in economic activity.”
State capture ’caused delays’
The spectrum auction was delayed for many years, leading analysts to question the government’s commitment to economic reform. Ramaphosa blamed the delay on the impact of state capture.
“The auction of spectrum is an important achievement. It was delayed for many years due to the policy drift, state incapacity and vested interests that were a feature of the era of state capture,” he explained.
“The fact that we have now completed this process reflects the determination of this administration to undertake – and accelerate – the far-reaching reforms that our economy needs to grow and create jobs.”
Besides the auction, Ramaphosa’s administration has initiated several reforms in recent months aimed at unlocking investments in energy, freight rail, ports and water resources.
The President also hopes to unlock further private investments in infrastructure projects through the government’s R100 billion Infrastructure Fund.