“What are you going to do with [faster data on] LTE? You can’t speak any faster,” Alan Knott-Craig, the combative CEO of Cell C, told the AfricaCom conference in Cape Town last week, arguing for cheaper data costs.
“We need to be talking not 5c a meg but 5c a gig,” he said, to applause.
Though megabytes were once the most apt measurement of data usage, Knott-Craig argues – correctly – for the thousand-times larger measurement, gigabytes, which are used by fixed-line broadband providers.
Notwithstanding the irony that Knott-Craig, as the founding CEO of Vodacom, established the pricing and informal duopoly that exists with MTN in the cellphone industry, he has a point.
It was a theme echoed across the conference, which is the largest gathering of the cellphone industry in Africa, as smaller operators and equipment suppliers argued, essentially, for cellular networks to embrace a different pricing model.
Even though the cost of calls and data has dropped significantly over the years (a meg cost 5c where it once cost R8.40, as Knott-Craig mentioned), it is still too high.
With the launch of long-term evolution, or LTE, networks, the focus is shifting to data usage – and the costs associated with it.
Unlike current 2G and 3G networks, which are essentially aimed at voice traffic with faster data speeds bolted on, LTE (or 4G) is designed as primarily a data system. Ultimately, voice calls will be transmitted like any other data, specially as voice-over internet protocol like Skype.
“You can’t speak any faster” was a phrase repeated over and over last week in the cavernous halls of the Cape Town International Convention Centre, whose name proves that the IT industry isn’t the worse offender when it comes to absurd and unpronounceable acronyms.
The costs are simply too high – and are keeping the “next billion” internet users in cash-poor emerging markets off their phones for fear of what surfing will cost them.
After mandating that interconnect call costs should be reduced annually, the Independent Communications Authority of South Africa and the government are now trying to bring down data costs, and build up broadband.
At the end of the month, parliament’s portfolio committee on communications will hold a two-day hearing into the costs of telecommunications.
Broadband is too expensive in South Africa, no matter who supplies it. This is a historical legacy wrought on an unsuspecting public by a telecoms industry that has always been able to confuse its users with technical complexity. The computer industry has done it for years with over-powered computers most people never need; while cellphone manufacturers have us on an annual treadmill of upgrades that are often minor and hardly earth-shattering.
But smartphones are now as much fashion accessories and statements of financial health as they are telephones or mini computers.
Which brings us to the delicious irony of Knott-Craig’s stewardship of Cell C, the third-largest local operator. There is always a hint of derision and mutterings of “ironic” that he should be up against the massive conglomerate that he built and resigned from as group CEO about four years ago.
Bitterness and irony aside, who else would price-conscious consumers want to dismantle the system than the man who built it and knows all its secrets?
A year into his tenure, it is too soon to say if that will be the second installment to Knott-Craig’s legacy. In the meantime, data-hungry wireless consumers will be hoping his revised logic seeps into the industry at large.
Or we can all try speaking faster.
This column first appear in The Times on 18 November 2012.