COVID-19: Streaming surge expected as MTN cuts data prices in SA

23 Mar 2020 - 15:03

Published under the Creative Commons Licence

South Africa’s second largest mobile network operator, MTN, on Friday announced that it would drop its mobile data prices in the country by up to 50% from 15 April.

MTN's data reductions and a possible lockdown in SA could lead to a surge in streaming,

The move, which comes as social distancing is being encouraged due to the COVID-19 outbreak, could lead to a surge in music and video streaming.

MTN says it will reduce the price on its 1GB 30-day bundle from R149 ($8.50) to R99, representing a 33.6% cut.

“The R99 is the maximum we are going to charge per gig, that’s our ceiling,” MTN SA CEO Godfrey Motsa said. “But there will still be some prices lower than that. We have made significant double-digit reductions in our bundles that range from R10 to R149.”

“This will only happen from 15 April. The problem is that the logistics are a bit of a challenge now with people working from home so we’re still trying to make sure that we get everything 100%.”

On 15 March, South African President Cyril Ramaphosa announced a national state of disaster due to the COVID-19 pandemic, prohibiting gatherings of more than 100 people and closing schools from 18 March until Easter Weekend. However, it is expected that more restrictions will be instated on Monday as the country confirmed 402 COVID-19 cases.

MTN said it would also give its customers free ‘lifeline data’ of 20MB a day through its instant messaging platform Ayoba. Ayoba has more than 500 000 users and the free data is part of the company's agreement with the Competition Commission.

High data costs have been a subject of much debate in South Africa. In December last year, after a two-year investigation, the Competition Commission released a data cost inquiry report that ordered the two dominant mobile network operators, MTN and Vodacom, to reduce data costs. The commission said there was scope for price reductions between 30% and 50%. MTN and Vodacom control more than 70% of the SA mobile industry.

With the recent encouragement of social distancing, and a possible lockdown today, there could be a spike in Internet traffic that will strain bandwidth in South Africa.

In Europe, online services such as Apple, Amazon, Netflix and YouTube have limited streaming quality for about a month to keep usage low. No South African service providers have indicated how they plan to deal with the anticipated upsurge in online traffic.

MTN