Free 10GB data per month for South Africans and 10% price increases for Zimbabweans

Sometimes you marvel at just how differently politicians and govt officials from different countries think. I feel like the South Africans are just mocking/exposing us right now. In the same week where we saw an excise tax of 10% lead to more expensive fixed internet in Zimbabwe, we hear that South Africans will be getting 10gb of free data per month per household.

You know how the United Nations says internet access is now a basic human right. In both Zimbabwe and South Africa, officials have expressed commitment to ensuring all citizens get this human right. In practice though, actions reveal who meant it. 

South Africa walking the walk

The South African communication minister had this to say,

Data has become a new utility like water and electricity that our home needs

South African Communications minister Khumbudzo Ntshavheni

That statement on its own means little. We have had Zimbabwean govt officials admit the same. That’s usually where it ends but the SA minister went on. As quoted by Mybroadband,

At some point, South Africa will say… despite whether you are rich or poor, whether you are employed or unemployed, [every household] have access to 10GB per month without failure because that’s what this government will deliver

South African Communications minister Khumbudzo Ntshavheni

Now that’s different. Here the minister is committing her govt to delivering this. And in putting this on record she is opening the govt to criticism if the 10GB per month never materialises. 

I’ll admit that I’m not brave enough to take politician promises to the bank though. Especially when said promises are left open ended, with no set delivery date. The minister said ‘at some point’ and that sounds like wishful thinking. When is that point? Later this year? Just before the 2024 South African general elections? Or 2040? The govt has not boxed itself in.

Govts need their wiggle room

This may be because of the practical implications of delivering the 10GB. 

Take for example the fact that the average MTN prepaid customer uses around 2.5GB per month whilst the postpaid customer uses 11.1GB. If these customers got a free 10GB handout per month, MTN would be in trouble. The 10GB would be sufficient for most customers’ needs.

The question then becomes, how will the govt pay for this data? If the govt pays market value for this data and does not mandate people switch to specific mobile network operators (MNOs), players will be relieved a little. However, like in MTN’s case, the sole/major customer would become the govt and that’s not ideal.

In the short term, the govt paying for 10GB for all MTN customers for example would lead to a revenue bump for the MNO. The govt would have bumped up all those 2.5BG customers’ usage to 10. However, this freebie business may stunt data usage growth in the long term and the MNOs do not want that.

Can the South African govt even afford this? The Telkom 10GB bundle costs R99 but the other MNOs price it at around R436. So, even at the low end, providing 10GB to their over 17 million households would cost R1.7 billion (US$113 million) per month. The govt probably won’t be shelling out this sum every month but whatever arrangement is made, that’s the true market value of the freebie 10GB deal.

Spectrum licences at ransom

The SA minister went on to reveal the govt’s plan to get every South African online. 

In the past, we have seen the telecommunications operators ignoring social obligations and opting to pay negligible penalties instead of connecting our people

South African Communications minister Khumbudzo Ntshavheni

That won’t fly. Now these telcos have to commit to providing connectivity for schools, medical facilities, and traditional authorities. The govt through Icasa (their Potraz) will require telcos to meet those social obligations or risk their spectrum licences being revoked. 

Remember radio frequency spectrum is finite and yet telcos need it to provide cellular services. So, for the spectrum auction that’s scheduled for March 2022, South Africa will require telcos to commit to provide connectivity to 18,520 schools, 5,731 clinics and hospitals, and 8,241 offices of traditional leaders. Said the minister,

This time around [industry regulator Icasa] will include the fulfilment of service obligations as part of the licensing conditions without an option of a penalty

In my humble opinion such a move is likely to lead to better results than the one we have in Zimbabwe. See, in SA’s case, the MNO would be risking their licence by not improving coverage to underserved or strategic communities. However, the MNO would retain the impetus to rectify it meaning the MNOs will provide that service in the most efficient way possible. 

In Zimbabwe, the MNOs have to surrender actual money to the govt. Then it becomes the govt’s job to make sure those underserved areas get coverage. We all know just how efficient and effective govts are. An economy is better served when such activity is left to capitalist companies looking to complete the process quickly, cheaply and effectively. 

So holding spectrum hostage to ensure compliance seems like a better strategy. Even if it has its own problems.

O my beloved Zimbabwe

When are we going to see policies that lead to better connectivity and cheaper access in Zimbabwe? What the South Africans are doing shows that at the very least, some people are seriously thinking about how to improve the connectivity situation. We happen to be trailing South Africa in that regard and so I hope our own minister Muswere is taking notes on what his peers are doing.

Zimbabwe’s problems need custom solutions but one can never get too much inspiration. The whole Zimbabwean govt should be coordinated in tackling this connectivity problem that we have. Everything from our tax regime to our environmental policies should take connectivity into account.

So the high cost of internet access should be treated as an attack on human rights and dealt with accordingly. The govt collects a little too much from Zim telcos and internet users, leading to high final prices for end users. Look at this:

• Excise duty  – 10%

• Corporate tax – 24.72% (inclusive of AIDS levy)

• Value Added Tax – 14.5%

• IMTT – 2% (whenever funds exchange hands)

• USF contributions – 1.5% of MNOs’ annual GROSS revenues 

• And more

I’m not asking for 10GB free data per month. I’m just asking for policies that will make it cheaper for every Zimbabwean to buy their own 10 GB. It shouldn’t be, but it does feel like too much to ask.