Presentation to the Public Hearings for Data Services Market Inquiry Dr David Harrison CEO, the DG Murray Trust 17 October 2018
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Presentation to thePublic Hearings for Data Services Market Inquiry
Dr David HarrisonCEO, the DG Murray Trust17 October 2018
Outline
1. Introduction to The DG Murray Trust
2. Structural barriers continue to choke national development
3. Mobile technology provides an opportunity to leapfrog some of structural barriers
4. Opportunity has been lost over the past decade as universal service & SED obligations have not been optimally used
5. Recommendations
Structural barriers continue to choke national development
Invest in South Africa’s potentialSource: Statistics South Africa. Poverty Trends in South Africa: An examination of absolute poverty between 2006 and 2015. https://www.statssa.gov.za/publications/Report-03-10-06/Report-03-10-062015.pdf
In 2015, 55% of South Africans lived below the poverty line
> R992/Month < R992/Month
2
The top 10% owns 90-95% of wealth in SAPe
rcen
tage
of w
ealth
Percent of population share 0 20 40 60 80 100
Source: Orthofer A, 2016. Wealth inequality – striking new insights from tax data. Econ3x3. http://www.econ3x3.org/sites/default/files/articles/Orthofer%202016%20Wealth%20distribution%20and%20tax%20data%20FINAL.pdf
NIDS 2010-2011
3
0
20
40
6
0
8
0
100
• The poorest 50% of the population has almost no wealth at all, implying extreme polarization
4
Even halving data prices won’t facilitate real market participation by the poorest 50% of the population
“…by 2020, 100% of South Africans will have access to broadband services at 2.5% or less of the population’s
monthly income” – National Broadband Policy 2013
Poor people pay a sixth to a third of per capita poverty line income on 1 GB data
SA Poverty line in 2017: R1,136 per person
Poorer consumers get the rawest deal, paying 10 – 30 times more for their data
1. Pre-paid bundles cost about twice as much per GB as post-paid contracts.
2. Smaller bundles cost much more (eg. R12 per 30MB = R400 per GB c.f .R16 per GB for people who can afford to buy 100GB data)
3. Poorer South Africans are more likely to run out of data and be exposed to excessive out-of-bundle data rates.
4. Data offerings and communication is hugely confusing for semi-literate people
5
Contents
1. Introduction to The DG Murray Trust
2. Structural barriers continue to choke national development
3. Mobile technology provides an opportunity to leapfrog some of structural barriers
4. Opportunity has been lost over the past decade as universal service & SED obligations have not been optimally used
5. Recommendations
Social networks scale superlinearly
Number of people/ households participating
0.01 1 10 100 1000 10,0000.1
0.1
1
10
100
1,000
10,000
0.01
“Met
abol
ic r
ate”
Social network scaling (exponent 1.15)
Based on: West G (2017). Scale: The universal laws of life, growth and death in organisms, cities and companies. Penguin Books, NY
Infrastructural scaling (exponent 0.85)
Each time a social network doubles in size, the number of connections increases ~ 4 fold
Factual source : West G (2017). Scale: The universal laws of life, growth and death in organisms, cities and companies. Penguin Books, NY, p317
No. of connections = ~ ½ n2
Exchange of goods, skills and knowledge drives social innovation
Mobile technology should be the virtual bridge, but it is not
Invest in South Africa’s potentialThe legacy of Douglas and Eleanor Murray
9
Information and communication for • Parents • ECD practitioners• Teachers• Nurses• Social workers• Job seekers• Etc.
High demand for data-light
services
Demand for data-rich services constrained
Public benefit organisations
Government services
Contents
1. Introduction to The DG Murray Trust
2. Structural barriers continue to choke national development
3. Mobile technology provides an opportunity to leapfrog some of structural barriers
4. Opportunity has been lost over the past decade as universal service & SED obligations have not been optimally used
5. Recommendations
The unique advantage of mobiles is their presence in the home
Statutory obligations should capitalise on that
Contents
1. Introduction to The DG Murray Trust
2. Structural barriers continue to choke national development
3. Mobile technology provides an opportunity to leapfrog some of structural barriers
4. Opportunity has been lost over the past decade as universal service & SED obligations have not been optimally used
5. Recommendations
Start to implement specific, pro-poor strategies to expand access to digital information.
We fully endorse the call to reduce the general cost of data in South Africa.
But it is not enough.
Recommendations
1. Zero-rate mobile data costs for services provided by PBOs and government
2. Address specific pricing strategies to stop poorer consumers being disadvantaged
3. Government should provide a full account of the real costs and benefits of universal service and socio-economic development obligations imposed on network operators
13
1. Zero-rate mobile data costs for services provided by PBOs and government
14
Proposed structure of zero-rated mobile services for PBOs and government
USER Mobile network operator Online content
On Social
Innovation
Register
YES
NO
Reverse bill
User pays
Allocate cost against SED spend
2. Address specific pricing strategies to stop poorer consumers being disadvantaged
1. Make the unit price of pre-paid and contract data the same
2. Ensure the same unit price for all bundles, regardless of size. Suppliers would still compete on unit prices, or bundle configurations not determined by bundle size.
3. Data should also be rolled over for at least 3 months to allow for changing usage patterns – no minimum roll over period is currently specified by ICASA.
4. Ensure effective implementation of current requirements that users are notified when 50%, 80% and 100% of their data is used.
5. Require that prepaid mobile data offerings and data bundles are consistent, clear, easy to understand and comparable between mobile networks
15
Government should provide a full account of the real costs and benefits of universal service and socio-economic development obligations imposed on network operators
• In the interests of both accountability and improvement, Government should make available a review of the benefits and financial costs of the implementation of mobile network operator universal service (USO) and socio-economic development (SED) obligations.
• This should serve as the basis for optimizing the use of these funds in future.
16
Thank you
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