The Competition Commission and Vodacom have come to an agreement that will see the communication service provider slashing data prices by up to 40% on April 1.
Meanwhile, MTN consumers will have to wait until the end of the month for the announcement on what they intend to do with their data prices.
Speaking at a joint press conference on Tuesday announcing the agreement, Vodacom Group chief executive Shameel Joosub said that: “From April 1, we will introduce a range of initiatives that will result in R2.7 billion in additional savings for customers. This forms part of a broader programme to create a social contract, which will address pressing societal challenges in our markets.”
Joosub said that the cuts come as a result of the concerns raised by the Competition Commission on the high prices of data in the country.
In the commission’s final Data Services Market Inquiry report released in December, the watchdog ruled that Vodacom and MTN had two months to reduce their data prices by between 30% to 50%.
Joosub said they decided to engage constructively with the commission on the issues arising from the report to bring down the cost to communicate and promote digital inclusion.
“In terms of the agreement, and following confirmation by the tribunal, Vodacom will introduce price reductions across all its monthly bundles and provide free access to basic internet, essential services and cheaper pricing to the poorest communities. This will promote greater digital inclusion and assist with societal problems in education and unemployment,” Joosub said.
The service provider said that the cut means 1GB of data — valid for 30 days — often referred to as the “headline price” will be reduced by 34% from R149 to R99 on all channels.
“Discounts will be provided on all 30-day bundles while further decreases will be effected on April 1 2021,” Joosub said.
The commission also required that the service provider give users free “lifeline data” to ensure all users across all income levels get access to data.
To this end, Vodacom announced that it will be consolidating all existing zero-rated data services with new essential services aimed at social upliftment into a single platform called “Connect U”.
Connect U will provide Vodacom customers with:
- Free access to job portals, where youth can search for employment and upload their CVs;
- Free educational content similar to an e-School platform, which provides CAPS curriculum-aligned content from Grades R–12;
- Free health and wellness information through the Mum & Baby platform focused on equipping mothers and caregivers with advice on pregnancy, neonatal and childcare through SMS, educational articles, tutorials, videos and other tools;
- Free access to Facebook Flex, the low data alternative to Facebook that enables customers to stay socially connected;
- Access to two free SMS’s per day to customers provided they have purchased in the past month and they can access these on the new portal;
- Extending further discounted bundle offers to pre-paid customers in areas where most people are living beneath the poverty line. This will benefit more than 2 000 suburbs and villages, ensuring that this benefits people that need it most;
- Zero-rated access to select government sites to assist members of the public in accessing government services such as home affairs, ambulance services, education sites and government communication services. This will assist everyone in gaining access to much-needed government services as these are now moving into the digital space as well;
- Expanding the zero-rated offering to all schools, universities and T-Vet colleges across the country. This will ensure that learners and students enrolled in these institutions will be able to access relevant information for free via their portals;
- A full zero-rated internet search function powered by Wikipedia. This will allow customers access to the entire Wikipedia database of knowledge free of charge, and;
- Free access to other essential information such as local and international headlines, trends and the weather.
Commissioner Tembinkosi Bonakele said they were delighted to come to an agreement with Vodacom even though it was still subject to confirmation by the commission’s tribunal.
Bonakele also said some of the details of the agreement were confidential to help protect competition.
“We were careful in crafting and announcing the agreement that it should unleash and not chill competition,” Bonakele said.
Minister of Trade and Industry Ebrahim Patel said that lower data costs have a positive effect in crossing the digital divide.
“More and more of the core services that lie at the heart of the digital agenda are now being rendered through digital means,” Patel said.
MTN SA’s Executive for Corporate Affairs, Jacqui O’Sullivan, said that MTN will be making an announcement on data prices before the end of the month.
“MTN continues to engage in constructive discussions with the Competition Commission. We look forward to making an announcement, in this regard, before the end of this month,” O’Sullivan said.