Evaluate the impact of recent regulation changes on mobile consumers in South Africa

Abstract

In recent years, the cellular industry has seen a massive growth in terms of providing cell phone services to people in different parts of the world including South Africa. This technology has made the world a smaller place to live in and has allowed people to communicate with anyone anywhere in the world for both joyous moments and emergencies. At the same time, there are claims that cellular towers in very close proximity to residential areas affect people negatively by causing ailments such as headaches and even cancer. The impact of regulation changes for the cellular industry in South Africa has caused much debate recently. This debate has been around the high interconnection charges that operators charge subscribers for calls to other networks. Mobile Virtual Network Operators are thriving mainly because of these high interconnection fees, their bulk buying power as well as one-sided regulations that are favourable to them. The objective of this research report is to evaluate the impact of recent regulation changes on South African cell phone consumers. The research is based mainly on four regulations in different areas of the cellular industry. These are the reduction in interconnection fees, the deregulation of infrastructure based on Telkom’s monopoly in the market, the spectrum allocation for new market players and the enforcement of service level agreements by ICASA based on licensing conditions. Twenty in-depth Interviews were conducted with various cell phone users from the various South African cell phone companies in order to obtain data for the research. This included seven different individuals who are using cell phone services from more than one service providers. Interview data was content analysed to see how the change in regulations has impacted cell phone users in South Africa and how the industry can improve the affordability of cell phone services in South Africa. Researcher’s key findings are that reforms in South African telecommunication sectors have been slow leading to poor competition in South African Cellular industry. Thus ICASA failed to improve the cell phone affordability for cell phone users in South Africa in the past. However, in recent past ICASA has taken right steps in right direction to improve the overall cell phone consumer experience in South Africa by opening up frequency spectrum for new market players, allowing all cell phone operators and Neotel to rollout transmission network, enforcing reduction in interconnection fees between the cell phone operators and fixed line operators as well as implementing service level agreement with cell phone operators’ on behalf of cell phone consumers.