Lezanda Morley
Lezanda Morley Product Manager: Mobility

For millions of South African consumers, mobile data is the only way to access the Internet.

Is a wholesale APN the answer to high data prices in SA?

Yet, as we know, South Africa has a chronic problem with high data fees – the highest among Africa’s largest economies – even in the wake of an effort at mass mobilisation in the form of #DataMustFall. There is more than one reason for this, but a lack of competition is undoubtedly a factor. The good news is that as broadband wholesalers look to diversify their services by offering mobile data solutions, exceedingly high prices are sure to tumble.

The factors causing high data prices

The blame for South Africa’s high data prices has passed back and forth over the years between government and the private sector. Last year, the Internet Service Providers’ Association of South Africa (ISPA) called for greater competition through wholesale deals to bring down prices. The Independent Communications Authority of South Africa (ICASA) subsequently began investigating the matter in July 2017 with the Competition Commission and the National Consumer Commission to seek solutions.

However, another driving factor has been a prolonged lack of additional spectrum, which has left operators with no choice but to invest further in their networks and erect more towers to ensure that quality does not fall below acceptable standards. MTN South Africa CEO, Godfrey Motsa, has warned that the mobile industry cannot continue to subsidise the “spectrum crunch” which has been negatively affecting the poorest in the country. In September 2017, Icasa published its second Draft Radio Frequency Spectrum Assignment Plan for public comment, which is still awaiting a final resolution.

The need for greater competition

Since there is a clear link between GDP growth and broadband penetration, the need to find solutions has become a matter of urgency. Embracing competition in the retail market for mobile connectivity solutions by opening up wholesale offerings to other licensees in the country is just one way to significantly impact data affordability and stimulate the economy

This would be a repetition of the story of ADSL in South Africa several years ago when consumer-friendly competition in this market drove down prices and led to improved packages for consumers. Consequently, uncapped ADSL and large unshaped capped accounts soon became standard fare for fixed-line broadband.

Wholesale APN from IS

Internet Solutions facilitates a route for new entrants in the mobile data market with its wholesale APN offering. This is a bulk data service offering with which end users can access the Internet or their own corporate network over the MTN, Vodacom, Telkom and Cell C mobile networks. It’s a usage-based payment model that promotes growth through volume discounting.

This allows wholesalers to act as a single connectivity provider (with a single agreement) and allows them to bundle mobile data services with DSL and fibre solutions. This gives wholesalers an opportunity to diversify their service offerings and benefit from truly competitive pricing without committing to a long-term contract with a large operator.

If you are ready to begin exploring the potential of offering mobile data services to your customers, or if you simply want to learn more, get in touch.

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