Vodacom and MTN won’t be prosecuted
THE COMPETITION Commission yesterday said it had decided against prosecuting telecoms giants Vodacom and MTN following a complaint lodged by rival Cell C four years ago.
The commission said it found no merit in Cell C’s complaint that the country’s biggest network provider behaved in an anticompetitive manner.
“This decision follows a lengthy investigation which revealed that there were several features in the mobile telephony market which affect the ability of smaller mobile operators to compete in the market,” the commission said.
In its complaint, Cell C alleged that Vodacom and MTN had engaged in pricing strategies that made it cheaper to make on-net calls (calls between users of the same network) as compared to off-net calls (calls between people on different networks).
Margin squeeze
In particular, the company complained that the price differentials applied by Vodacom and MTN prevented competition and further accused the two companies of excessive pricing, inducement and margin squeeze.
The commission said while Cell C allegations could not be collaborated, there was scope, however, for further investigations in the anti-competitive behaviour in the sector.
“There is evidence to suggest that this conduct and other features of the market, in particular the price differentials applied for on-net and off-net calls as well as longterm subscribers’ contracts, have made it difficult for late entrants such as Cell C to compete effectively,” the commission said.
The anti-graft agency said it would particularly seek to explore the state of competition in the sector at the retail level, where it said it was concerned that years after the licensing of Cell C and Telkom Mobile, two players still dominated the market. It said it would approach the Independent Communications Authority of South Africa to explore regulatory interventions.
Cell C said owing to the period that has elapsed since the lodging of this complaint Cell C has decided that it will also not self-refer the matter to the Competition Tribunal and had withdrawn the complaint.
MTN said it welcomed the decision by the commission.