SA’s faster network speeds means higher costs, say experts

With South African service providers Vodacom and MTN announcing higher speed data networks, experts are predicting higher costs for consumers.

“What the networks are doing – hats off to them – is trying to get things faster and get the latest technologies. But what they’re doing is just getting a faster Ferrari for the very few that can afford it,” Prezence Digital chief technology officer Tim Bishop told News24.

Bishop appeals to mobile operators to cut down on data bundle costs as faster speed networks may lead to expensive fees for users. The cost plays an important role as mobile data usage cost is predicted to rise significantly with the current data rates in place.

“All this speed is lovely, but the cost is what’s killing it,” Bishop stated.

Bishop also suggests an appeal to network end users for increased data usage, thereby decreasing cost with bulk consummation.

“Obviously the networks are focusing on the smart users because they’re the big data consumers at the moment, but they’re the data consumers at the moment because they can bloody well afford it,” he said. “Really, how it should work is that is when things become faster and more ubiquitous, prices should correlate to that.”

Bishop points out that the 4G launched in SA is about four times the speed of 3G. This does not comply with the standards of the International Telecommunication Union (ITU) who defines 4G as ten times faster. “Vodacom’s high-speed offering is pegged at around 40mbps, but still some way short of the 100mbps as required by the ITU to be defined as 4G,” reported News24.

“The demand remains strong; there’s strong competition in the SA market. Data revenue is up 24 percent year-on-year. The active data customers [are] up 35 percent. Now just over 12 million [and] all of the 12 million are buying data bundles on a monthly basis,” Vodacom CEO Pieter Uys told News24.

TechCentral reported earlier last month that Cell C CEO Alan Knott-Craig and Convergence Partners chairman Andile Ngcaba are in favour of a national wholesale network. The initiative determines that operators share the construction costs, but still compete on commercial level.

“On paper, it appears to make sense. Costs will be reduced and consumers will benefit. However, it’s an idea that needs to be interrogated carefully to ensure there isn’t the opportunity for collusion,” writes Duncan McLoed, editor of TechCentral.

Digital experts are generally united in their views of the 4G evolution as being part of Africa’s journey to Long Term Evolution (LTE).

Posted in: Telecoms

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