/ 16 March 2018

Icasa regulates in the public interest

Beleaguered Lesotho Prime Minister Thomas Thabane.
Beleaguered Lesotho Prime Minister Thomas Thabane.

“The Independent Communications Authority of South Africa (Icasa) has an obligation to ensure that there is universal broadband provision to ensure that every village and person in the demarcation identified in our country, can access and participate in the digital economy at affordable prices,” says Willington Ngwepe, chief executive at Icasa. Ngwepe has held the position for almost six months and prior to this appointment, he was the chief operations officer of the organisation.

The communications authority is mandated to regulate South African telecommunications, broadcasting and postal services in the public interest. Like the public protector’s office and the Independent Electoral Commission, it is a constitutionally prescribed institution to protect the rights of consumers and safeguard fair access to their rights. For this reason, Icasa must rely on the collection of statistics to monitor and report on progress and developments in the Information and Communication Technology (ICT) sector.

When the ministry of Telecommunications and Postal Services was launched, the aim of the new department was to derive more value from the booming information and telecommunications industry and develop innovations in the postal services sector through regulation, monitoring and attending to consumer affairs. While voice was still the dominant revenue driver in the market, its prominence was declining due to consumers changing from voice to data with the advent of Over-The-Top (OTT) services such as WhatsApp.

Voice tariffs have declined since Icasa’s intervention in 2010 and generally there has been a downwards trend in pricing of services, says Ngwepe. This has shifted attention to data services where Out-Of-Bundle rates were relatively higher than in-bundle rates. The strategy is to make Icasa a key part of the conversation on telecommunications and developments in the sector. There is increased collaboration with non-industry specific regulators such as the Competition Commission, which is conducting a “data market enquiry” and will probably have recommendations for Icasa soon.

Icasa’s role is to facilitate the regulation of prices and instituting transparency obligations to telecommunications service providers, but it is easier to regulate transparency obligations than price regulation.

Pricing for services from service operators includes costs of rolling out fibre, or setting up base stations, and there are other environmental and municipal applications that come at a cost separate to that of the infrastructure. The regulatory and legislative processes and their costs are often cited by service operators as impediments to the dropping of prices.

“In order to regulate prices, we are required to conduct detailed analyses of the costs across the value chain, so as to assess the cost of service for the operator, reasonable returns for them as a business, and finally, determine a fair retail price for the public,” explains Ngwepe. The ongoing and soon-to-be-concluded end-user and subscriber service charter seeks to address the major issues relating to transparency, expiration of data and the high price of out-of-bundle rates. The draft regulations, if adopted by the end of March, will translate into new rules of engagement governing telecommunications and include changes relating to some complaints from the public.

Public discontent about high data tariffs charged by mobile service operators and the #datamustfall campaign have sparked off several comparative debates, assessing South Africa’s high data costs with its peers — mostly neighbouring countries — but also as far afield as India and Brazil. Icasa conducted a benchmarking exercise on the prices of 1GB and 2GB data bundles offered by mobile operators in the Southern African Development Community (SADC) region.

“Although this was an exercise of comparing oranges and bananas,” jokes Ngwepe, as the economic and political circumstances are vastly different, it was still worthy and insightful. The results illustrated that on average, the data prices of SADC countries were relatively higher than those of South Africa’s largest operators: Vodacom, MTN, Cell C and Telkom Mobile. In Mauritius, Malawi, Mozambique and Tanzania mobile service operator prices were cheaper than South African operators, sometimes by up to 80%, but Ngwepe warns that benchmarking according to region neglects certain factors that may contribute to the different conditions for pricing.

Cellphone penetration has increased access to some form of telecommunications: 87% of households reported using a cellphone, while landline usage decreased from 10.9% to 9.4%. ICASA imposed universal service regulations to increase connectivity in schools, which has almost doubled from 2 862 in 2016 to 5 238 in 2017. Monitoring functions include assessing coverage of networks among the population. 3G coverage reaches 99% of the population, whereas LTE/4G coverage increased from 75% to 77%, meaning that more and more South Africans are accessing better quality services through the efforts and oversight function of the communications authority.

“Of lately, when the convergence of technology is shaping our world, the means to cater for increased traffic is paramount. The issue of migrating from analogue to digital signal remains a priority, but not before such a time that that migration will not create a digital divide and keep others from the right to access information,” says Ngwepe. As a member state of international communications authorities, we may lose the protection that is offered by such bodies if the scheduled migration to digital is not adhered to — this migration remains a top priority for Ngwepe and the organisation.

In perspective, mobile data traffic has experienced a significant 67% increase in the period 2016-2017. Smartphone subscriptions increased by 72.9% in 2017 as compared to the previous year, increasing the influence that new generation technologies have on the lives of ordinary citizens on a practical level.

Increased access to improving technological hardware should translate into ease of communication and increased quality of that information. Ensuring that the public has access to quality communication services at affordable prices remains the central task of Icasa.