SA Competition Commission: Flags Internet Cost Concern on Price Hikes

• The South African Competition Commission is concerned about recent internet price increases, noting that wireless internet rose 4.1% and wired internet 3.5%, outpacing headline inflation of 3.8% in the first half of the year.
• Internet is classified as an essential service, crucial for economic participation and access to employment, education, and healthcare.
• Operators attribute recent price hikes to inflation, exchange-rate pressures, and power outages.
• Other essential costs, such as petrol (26%), minibus taxi fares (13%), and bond repayments (9.6%), have increased far more dramatically than internet services.
• The rising cost of living has led to renewed financial stress for households, with over half of surveyed individuals spending more than 40% of their income on debt repayments.

The Competition Commission's explicit concern over SA essential services internet pricing, even when compared to more rapidly increasing costs elsewhere, signals a potential for increased telecom pricing scrutiny South Africa.

The South African Competition Commission has voiced apprehension regarding recent increases in the cost of internet access, which it categorizes as an essential service. While internet service inflation remained relatively stable for most of 2025, prices began to climb in April and May of the current year. The Commission's latest Cost of Living report highlights that wireless internet services saw a 4.1% increase, and wired services rose by 3.5%.

These recent South Africa internet price increases are particularly concerning to the Commission because they have outpaced headline inflation, which registered a cumulative 3.8% increase in the first half of the year. The anti-trust authority attributes these hikes to price adjustments by several major operators, who cited factors such as inflation, exchange-rate pressures, and persistent power outages as contributing to the higher costs. The Commission underscores the critical role of internet connectivity, stating it is fundamental for households to participate in the modern economy, enabling access to employment, education, healthcare, financial services, and government programs.

Despite these recent trends, a broader historical view reveals a different picture. Over a six-year period from January 2020 to July 2026, both wired and wireless internet costs increased at a slower rate than headline inflation. During this timeframe, wired internet rose by 18.6% and wireless internet by 6.4%, while overall headline inflation stood at 36%. However, the Commission emphasizes that the more recent acceleration in internet pricing is what warrants attention.

While the SA Competition Commission internet cost concern is notable, the Cost of Living report also reveals that other essential services have experienced significantly more dramatic price surges. For instance, petrol inflation soared by 26% in the first half of the year, minibus taxi fares increased by 13%, and the cost of bond repayments climbed by 9.6% over the same period. These figures underscore the widespread financial pressures facing South African households.

Further compounding household expenses are substantial increases in utility costs. Electricity tariffs rose by 8.1% between July 2025 and July 2026, while water prices saw a 10.1% increase during the same timeframe. The Competition Commission attributes these utility hikes largely to the challenges of ageing infrastructure and the substantial costs associated with operating, maintaining, rehabilitating, and expanding electricity and water networks. These increases, which typically occur annually in July following municipal surveys, have an immediate and unavoidable impact on household budgets.

Educational expenses also contributed to the rising cost of living. Public primary school fees, measured annually in March, increased by 6% between 2025 and 2026, with secondary school fees rising by 5.7%. The cumulative effect of these sustained price increases across various essential goods and services has significantly eroded purchasing power, making it increasingly difficult for households to meet their basic needs.

The persistent rise in the cost of essential goods and services has led to a significant deterioration in household financial stability. The fifth annual DebtBusters Money-Stress Tracker, conducted in May and June 2026, indicates a shift from the relative financial stress stability observed in 2025 to renewed financial pressures. This mounting cost-of-living crisis is primarily driven by rising expenses, which have emerged as key sources of financial anxiety in 2026, particularly affecting lower-income and younger demographic groups.

The survey highlights that the top short-term worries for many South Africans include running out of money before month-end and struggling with monthly debt payments. Alarmingly, more than half of the 18,000 respondents reported spending over 40% of their take-home pay on debt repayments. This paints a stark picture of the financial strain experienced by a large segment of the population.

The Competition Commission's explicit concern over SA essential services internet pricing, even when compared to more rapidly increasing costs elsewhere, signals a potential for increased telecom pricing scrutiny South Africa. Given the internet's designation as an essential service and its importance to the economy, the Commission's ongoing monitoring and reporting suggest that internet service providers may face future pressure to justify their pricing strategies, particularly in light of the factors cited for recent price hikes.

The Competition Commission's expressed concern over rising internet costs, even if slower than other essential services, signals potential future regulatory scrutiny or intervention in the South African telecommunications sector. Legal and compliance teams at ISPs and other internet service providers should monitor the Commission's activities and be prepared to justify pricing strategies, particularly regarding the factors cited for recent price hikes.

Source: Original reporting via {source}