Vodacom, MTN told to cut data cost
VODACOM and MTN must bring down the costs of their data bundles by between 30% and 50% in the next two months or face prosecution by the Competition Commission.
This is one of the recommendations in the Data Services Market Inquiry report released yesterday by the Competition Commission.
Other recommendations include that the two leading telecoms companies, Vodacom and MTN, must independently reach an agreement with the commission to cease ongoing partitioning and price discrimination strategies that may facilitate greater exploitation of market power and antipoor pricing.
Chief economist James Hodge said: “The first finding is that the benchmarking process confirms that South African prices are higher than they ought to be. Especially if we look at prices across the other operations of the two biggest operators, Vodacom and MTN, in the other markets in which they operate, we see that often the prices in South Africa are close to double what the next most expensive country is.”
Hardin Ratshisusu, deputy commissioner at the Competition Commission, said: “Will there be penalties if Vodacom, MTN and Telkom Openserve etc don’t co-operate insofar as it relates to the recommendations we have made, (yes) there will be prosecutions. That is what we’re saying.
“We have options: with the information that we have, we have an option to proceed to the tribunal. We have an option to start a new case. We have an option to enter into a settlement agreement with the affected firms. So we urge and implore them to engage with the commission constructively,” said Ratshisusu.
Commissioner Tembinkosi Bonakel said: “We will see now what their responses are to our recommendations. We cannot continue debating data. We’ve done enough of that, reached our own conclusions and we think that the industry must come on board. If not, we will do what we need to do.”
The Data Services Market Inquiry was launched in August 2017 in response to a request from the minister of economic development after persistent public concern about the high cost of data in South Africa.