Correction: The article initially stated 20GB of free data per day, instead of 20MB. Apologies for any confusion caused.
MTN South Africa has announced the outcomes of engagements with the Competition Commission (CompCon), including 20MB of free “lifeline data” daily.
The timing of the announcement could not have been better, as the COVID-19 crisis forces millions of South Africans to stay at home. World Wide Worx has long argued that a basic allocation of free data was essential to expand Internet access in South Africa.
With much of the country going into lockdown, access has now become a basic need, along with housing, water and electricity, as the entire school and university population is forced to turn to remote education.
MTN made the decision in response to an announcement in December 2019 by the CompCom of a Data Service Market Inquiry, which required that mobile network operators provide “lifeline data”, as well as bringing down the cost of prepaid data.
The outcome of MTN’ss engagements with the CompCom is a set of voluntary undertakings “in the form of a social compact to further address the affordability of data services for its customers”. MTN says it remains in discussion with the CompCom on the options to formalise these elective solutions.
MTN has focused on three areas of reducing the cost to communicate: the affordability of monthly prepaid bundles, lifeline data and the zero-rating of data for public benefit service websites.
Vodacom made a similar announcement on 10 March, but rather than offer lifeline data, it expanded its range of zero-rated sites.
MTN SA said it will, from April 2020, reduce the price of its monthly bundles of 1GB and below by between 25% and 50%. The 1GB monthly bundle, formerly costing R149, will decrease by 33% to R99. This is the same reduction announced by Vodacom last week.
MTN will also expand the range of zero-rated websites, which already includes schools, to include health, public universities, vocational colleges, educational resources and employment sites. As Vodacom did in announcing a catch-all zero-rated portal called Connect U, MTN announced OpenTime, which will enable free access to public benefit services.
MTN’s approach is to offer a monthly 500MB free data access to public benefit services websites every month, making allowance for up to 500 sites. While this may prove insufficient to address all the needs of remote learning, MTN went a step further by agreeing to provide lifeline data.
It will provide each of its customers with 20MB of free data daily – the equivalent of 600MB per month. The data will be accessible via its instant messaging platform, Ayoba, which currently has 500 000 customers. It is likely that the free data allowance will see an explosion of use of the service.
While this does not address the issue of smartphone users being unable to update or use apps due to not being able to afford data, it does allow them to access the world of instant messaging at no cost.
The Ayoba app is available in isiZulu, isiXhosa, English and Afrikaans and can be used on Android devices. On 1 July, Ayoba Browsing of general websites will be made available. The service will allow MTN customers to browse the internet on websites of their choice between midnight and 5am.
Ayoba messages sent to a feature phone, or another user without the Ayoba app, arrive at these customers as a standard SMS. The response back from an MTN customer to the smart phone arrives as an Ayoba message and the MTN customer’s text reply is also free.
MTN hastened to assure investors that this would all be good for business. It said in a statement: “While there will be pressure on MTN SA’s short-term financial performance from these initiatives, MTN believes that the reduction in pricing will be compensated over time by elasticity and customer growth, and growth in prepaid data service revenue will return in a couple of quarters.”
It also called for the swift allocation of spectrum to make free and affordable services more viable: “Radio spectrum is the digital highway upon which we depend to carry increasing mobile data at more cost-effective prices. This is acutely felt in South Africa, which has among the lowest spectrum allocation in all our MTN markets. The release of new spectrum in South Africa is urgently needed and will greatly assist our ability to service increased customer demand in a more cost-effective manner.”
MTN SA CEO Godfrey Motsa said: “MTN believes that everyone deserves the benefit of a modern connected life and that starts with connectivity.”
Click here to read about additional measures MTN is taking to address the coronavirus crisis.