‘Cut charges in two months or face prosecution’

SOUTH Africa’s major telecoms providers, MTN and Vodacom, have been given two months to cut their data prices or face prosecution.

The Competition Commission’s Data Market Inquiry yesterday said that the two needed to slash prices, particularly for low-income consumers, and tabled initiatives to improve mobile price competition.

The commission said MTN and Vodacom’s prices were excessive in South Africa compared with other parts of the continent where the two operated.

The commission said the two needed to independently reach an agreement to reduce the tariff levels, especially prepaid monthly bundles, within two months of the release of the report.

Competition commissioner Tembinkosi Bonakele said MTN and Vodacom had to come up with a substantial and immediate reduction plan, particularly for prepaid monthly bundles. “The preliminary evidence suggests that there is scope for price reductions in the region of 30 percent to 50 percent,” Bonakele said.

He said MTN and Vodacom had to independently reduce the headline prices of all sub-500MB 30-day prepaid data bundles to reflect the same cost per MB as the 500MB 30-day bundle.

“Given their collective market position, adjustments to their prices should impact on market-wide pricing,” said Bonakele.

The report was initiated amid nationwide calls to slash data in a bid to level the economic playing field.

Research ICT Africa (RIA) said data rates across 37 African countries concluded that not only does South

Africa perform poorly relative to its continental peers, but this has worsened over time.

Bonakele said the commission received 16 submissions from major operators and consumer rights organisations.

He said the commission held public hearings in Pretoria in October 2018, where oral and written submissions were received.

Trade and Industry Minister Ebrahim Patel, who was also at the release of the report, said the pricing weighed heavily on low-paid consumers, as data costs were critical to the growth of the economy.

“Data prices are critical, not only to the performance of the digital economy, but the entire economy,” Patel said, adding that economies and consumers used data as the new currency of daily interaction.