Where Is Data Disappearing To?

A lot of people have been wondering why their cellular data is disappearing inexplicably on the major cellular networks in South Africa lately.

Despite cellular networks advancing the argument that people are losing data due to the increase of apps on smart phones. I think most people realize that they are being robbed by the networks.

The Problem

For me the issue is simple. There’s been a huge reduction in voice-call and sms usage in the last five years the world over. What’s interesting is calls have not only reduced socially as a result, but most people still chat through data platform video, voice call or voice-note at a cheaper rate than cellular voice-calls.

As a consequence this has resulted in a huge reduction in cellular voice-calls, smses and voice-notes via paid cellular service.

Case Study

Take for instance my personal consumption. Just five years ago I was spending +3500/mth for my voice, sms and limited data. That’s before I add my home ADSL that I used then. Now I spend less than R1200/mth for calls, data and unlimited fibre (a figure not adjusted for inflation) and I simply don’t voice-call through networks as much as I used to before.

This has given cellular network revenues and profits a significant haircut. Nevertheless, I’m not sure I have seen a commensurate correlation in retrenchments and job losses in the ICT industry. Not that I want to see retrenchments but they should be a given with the trends of proliferating category killing communication alternatives .

The answer to the mystery of the data blackhole is simple once such a context has been laid bare. One of the leading sources of revenue for cellular networks now is data, since calls have reduced.

However there is only so much data people can use now that they are not paying cellular unit rates, hence, networks need to find a way to push up data usage.

The Solution

So to push-up [force-up is the appropriate word] the spend per person on data to compensate for the huge hole in revenue left by falling airtime sales. I believe that gvt, ICASA and the networks have brokered a Faustian Pact that networks will do what ever it takes to push weight of sale and rapid, repeat purchase of data to maintain the networks and avoid shedding jobs.

Artificial Intelligence

In turn the cellular networks have invested in AI to find new avenues to generate revenue to keep these networks floating and profitable.

Similar systems have been employed in western banking systems by companies such as Goldman Sacks, where AI is making fractions of a cent on billions of trades to generate them billions in revenue and profits every year.

However, in South Africa our cellular networks seem to have employed the crudest form of the technology, which over the years has been sifting through a century of business history in its continuous learning process, to come up with an optimum model of increasing revenue and profits.

Exploitation Model

And by the looks of things, true to South Africa’s history, AI has learnt that exploitation and stealing [primitive accumulation] from the customers is the easiest way to increase revenue in the absence of any real innovation in proposition.

Simultaneously the AI has also learnt that our cellular industry is a collusive monopoly where consumers have no alternative to the four major cellular networks who are all engaged in the same practice. So even if it steals data, customers are left without alternative or recourse.

In other words, we are being forced to subsidize the operations, jobs and bonuses of these cellular networks by AI stealing our data and sometimes airtime reserves. This is similar to how western citizens during the banking crisis of 2008, were taxed to bailout banks and keep them going concerns.

That way we are keeping network employees employed, their executives taking home huge salaries, politically connected shareholders making money and government collecting taxes. It’s the proverbial they are too big to fail scenario we saw playing itself out in the US banking crisis.

Exploitation By AI

My fear is with the advent of AI this will be the new normal, where money will be taken from our accounts, phones and other savings without out recourse to enrich the rich.

It’s reminiscent of the apartheid system in many ways, and that’s because AI learns iteratively from history. South African AI and profit orientated algorithms are predisposed to repeat the trends of apartheid capitalism because it’s learning how exploitation and theft was very profitable. So it will revert to that model of optimization for future profits because capitalism can not survive without exploitation.

Segregation By Bailout

Now here is my gripe. Who decides which companies to save and which to let die in a free market economy where the prevailing principle is supposedly: businesses that are not agile to respond to market changes must be left to die? Particularly when small and medium size local businesses are left to fail in a free market, while the big usually foreign, global giants are bailed out with the hard earned money of the poor?

Are most home grown, growth economies not anchored by local small and medium sized businesses? So shouldn’t saving those SMMEs be a greater priority than saving lethargic, non-responsive, innovation bankrupt, foreign corporate monopolies like Vodafone (or is it com) that milk growing economies to enrich foreign shareholders?

White Welfare Funded By Poor Blacks

More critically, if big corporates are chosen for bailouts and if these corporates are in the hands of the previously advantaged at the expense of previously disadvantaged SMME owners, is this equitable? Better yet, is South Africa really a free market or a fascist, racially exclusive socialist, white welfare economy bolstered by poor blacks like the apartheid economy was?

It would seem South Africa is essentially an economy where select white, global corporates and companies with powerful BEE partners are not prone to the free market forces of sink or swim.

We must subsidize these privileged businesses, the same ones that have access to money markets and banks to keep them flourishing, monopolizing and paying huge bonuses to the privileged, advancing inequality further. Meanwhile, our small and medium size businesses are not only left to fail but they are also exposed to a rigged free market of protected monopolies, nepotism, opportunity preservation and bailouts for the monied, lighter skinned and connected.

Who makes these life or death decisions? I hear someone saying: they are preserving jobs of mothers and fathers. Are the not so connected small and medium sized business owners who are usually previously disadvantaged.

Are those left to die without bailouts and favors, not mothers and fathers? Are their companies not relevant to rescue in a nation desperately in need of transformation and home biased investment to remove the control of foreign capital?

Are their employees not mothers and fathers worthy of saving instead of saving multi-national monopolies that exploit, externalize their earnings while working against government and its citizens at the detriment of the SA and the African economy?

By Rutendo Bereza Matinyarare