Average mobile data prices in South Africa are too low and need to rise for operators to be able to afford to invest in next-generation broadband infrastructure, says MTN South Africa CEO Ahmad Farroukh.

“The price of data is, on average, around 13c/MB, or just over US$0,01. It’s too low,” Farroukh tells TechCentral.

The average cost of a megabyte of data ought to be closer to the average price of a minute of voice, which is currently between 49c and 59c/minute, or roughly between $0,03 and $0,05/minute, he says.

An average retail price for data of between 35c and 40c/MB would be “reasonable”, he says. “Then all of us [operators] can give better quality and have guarantees we can invest in the future.”

It’s “unscientifically proven”, but the price per megabyte “should be equal to your voice minute”, Farroukh says. “Actually, the cost of producing a minute [of voice] on the network is much less than producing a megabyte, especially in the absence of frequency.”

MTN, Vodacom and Cell C argue they need access to new spectrum, especially in so-called high-demand bands at 800MHz and 2,6GHz, in order to keep up with the growing demand from consumers for mobile data services.

Farroukh says MTN is constantly re-using existing spectrum, “refarming” voice frequencies for use with data. If the company had access to additional spectrum, a more reasonable price per megabyte would be around 18c to 20c, which would still allow for network investment to cater for growth. — © 2015 NewsCentral Media