Most people agree that lower mobile network prices would help South Africa and support its struggling economy — but free services? Not so fast, says Rudolph Muller, editor at MyBroadband.

The South African mobile market needs competition, not more government regulation, Muller said.

The Right2Know campaign, an activist group seeking to hold the South African government accountable, and other groups are calling for free basic mobile airtime and government regulation of mobile service prices to stop mobile operators from so-called ripping off the public, Muller said.

Some are demanding that cellphone companies improve the quality of service, including network outages, dropped calls, calls that don’t connect, and data coverage.

The idea that every South African has a right to communication services that are freely available and affordable is a utopian dream that resonates with many, but it is a lot like calls for the nationalization of mines and the expropriation of land without compensation, Muller said.

In a recent televised debate on eNCA, commentators accused South Africa’s mobile operators of profiteering, ripping off the public, and unreasonable pre-paid prices, MyBroadband reports.

The “Big Debate South Africa” is a TV series fashioned as a town hall that travels across the country holding leaders accountable and giving voice to ordinary residents and communities. It deals with controversial issues and tries to find solutions.

What activists on the debate failed to mention, Muller said, is that the only reason the poorest people in South Africa have communication services at all is because of businesses — Vodacom, MTN, and Cell C.

A mobile phone is often the only communication device many poor people own, thanks to mobile operators subsidizing both the device and the SIM card, and to shareholders and their desire for profits, Muller said.

Government-backed initiatives to connect the poor have already been tried in South Africa and it didn’t go well, Muller said, citing Telkom’s forced roll out of fixed lines in rural areas, and Sentech’s deployment of a national wireless network, and under-serviced area licences projects.

Do people really want the South African government and the Department of Communications to interfere in the operations of the mobile operators to help rural communities?

The South African government gave Telkom a decade-long monopoly, tried to block Seacom and EASSy from setting up shop in South Africa, and battled in court to stop operators from rolling out their own networks, according to Muller.

Instead of attacking the only companies to successfully bring telecoms services to all South Africans, the activists’ energy may be better spent asking government why its so-called affordable telecoms projects failed, he said.

This doesn’t mean South Africans should stop fighting for lower telecoms prices and better services. Affordable, world class telecoms services – especially broadband – are needed to ensure economic growth and increase South Africa’s competitiveness globally.

Local operators should be encouraged to roll out the latest network technology, improve service, become more efficient and lower prices in line with international standards.

The best way to achieve this is with competition, and this is where government’s focus should be – creating a business-friendly environment that encourages investment.

In ENCA’s “The Big Debate: the right to communicate,” Right2Know spokespeople said poorer countries in the region with fewer customers are rolling out more sophisticated infrastructure than South Africa. Namibia and Mauritius are ahead of ahead of South Africa for 4G, LTE networks. Poorer countries are doing better in terms of infrastructure rollouts.

Muller’s response: South Africa has world class mobile networks, with Vodacom and MTN pumping billions into their networks to keep up with global technology standards.

The reason local LTE deployments have been sluggish is not the fault of Vodacom or MTN. The culprit is lack of spectrum. The two largest mobile operators have already rolled out LTE-ready networks, but lack of spectrum holds them back from switching on these services, Muller said.

Muller blames the Department of Communications and the regulator ICASA for the continued delay in handing out spectrum. Criticizing Vodacom and MTN for sluggish LTE deployments, he said, is simply wrong.

In the debate, a Right2Know spokesperson asserted that some people use food money to buy airtime and will go hungry for airtime. The rationale is that the airtime may land someone a job. “These are the kinds of hard trade-offs that people have to make in their lives for the right to communicate,” the organization said, according to the MyBroadband report.

Poverty is a sad fact but it’s not the fault of the mobile operators, the author said. The poorest can also not afford computers, high-end smartphones, tablet PCs, or a meal in a good restaurant.

The way to help poor people afford products and services is not to make them free – it is to ensure that they have jobs and a steady income, Muller said. That’s how any economy works.

The author said South Africa’s anti-business policies and the unions’ continued battle with industry are hurting job creation.

Asking the government to also employ anti-business policies against mobile operators could result in mobile operators cutting back on network investments in poor areas.

Mobile operators are willing to build networks in rural and poor areas because they can make money there.

Campaigning for free services and regulated prices may achieve exactly the opposite of what the campaigners are fighting for. It may eradicate the incentive to build networks in under-serviced or poor areas, which in turn will result in declining service.

The government’s strategy to force Telkom to invest in rural areas without a business justification failed. There is really no need to do this experiment again, Muller said.

FOR-PROFIT MOBILE OPERATORS IN SOUTH AFRICA

Vodacom: 30 million subscribers, near 100% coverage
MTN: 25 million subscribers, near 100% coverage
Cell C: 13 million subscribers, 99% coverage

COMPANIES WHERE GOVERNMENT INTERVENED TO CONNECT SOUTH AFRICANS:

TelKom: 3.7 million subscribers, coverage in cities and towns
Sentech: no coverage

Source:  MyBroadband.