Data Prices Ease, but Affordability Gap Persists

Why It Matters

Affordable data is essential for participation in the digital economy, and lingering high costs risk deepening inequality and slowing South Africa’s economic recovery. Continued price pressure underscores the need for stronger competition and policy oversight.

Key Takeaways

• Data prices below inflation but still unaffordable for poor
• Mobile data cost ranks 31st of 45 African nations
• Commission secured 30‑50% prepaid price cuts
• Lifeline packages target low‑income households
• Market remains concentrated, competition challenges persist

Pulse Analysis

The South African cost‑of‑living report highlights a paradox: while headline inflation has eased, data prices continue to strain low‑income households. As internet access becomes a prerequisite for education, banking, and government services, even modest data fees act as a barrier to participation in the digital economy. The Competition Commission’s analysis shows wired broadband hovering just under 15 % annual growth and wireless data stabilising around 2 % after a brief spike, keeping prices below overall inflation but still out of reach for many.

The underlying cause lies in a highly concentrated mobile market. The 2019 Data Services Market Inquiry identified dominant operators wielding pricing power, especially over prepaid and low‑volume users. Subsequent regulatory commitments forced operators to slash prepaid bundles by as much as 30‑50 % and introduce ‘lifeline’ packages for vulnerable consumers. While these measures have produced measurable price relief and greater transparency, structural hurdles—such as limited mobile virtual network operator entry and uneven spectrum allocation—continue to limit competition and keep average data costs relatively high compared with regional peers.

Looking ahead, sustained affordability will depend on vigilant monitoring and targeted policy interventions. The Commission recommends tighter oversight of tariff‑setting mechanisms, expanded infrastructure sharing, and stronger consumer protection against hidden fees. With South Africa positioned 31st out of 45 African countries on the cost of a 1 GB package, there is clear room for improvement. Reducing data costs further could unlock broader digital inclusion, stimulate entrepreneurship, and accelerate the country’s overall economic recovery.