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Competition Commission: MTN & Vodacom data prices are anti-poor, not sustainable

The commission said these companies were interested in making a profit than providing reasonable prices to consumers.

Competition Commission officials, together with Trade and Industry Minister Ebrahim Patel, presented findings on the Market Services Data Inquiry on 2 December 2019. Picture: @CompComSA/Twitter

JOHANNESBURG - Competition Commission commissioner Tembinkosi Bonakele on Monday said high data prices by telecommunication giants Vodacom and MTN prevented smaller service providers from entering the market.

The commission said these companies were more interested in making a profit than providing reasonable prices to consumers.

The commission has called on both companies to reduce the price of data within two months or face prosecution.

Bonakele said data prices were currently not sustainable: “We have all of its powers, in terms of Section 8 of the Competition Act, that we can pursue. So, excluding other players, when you are dominant this could also be an offence. Charging excessive prices when you are dominant can be an offence. Price discrimination could be an offence. So, we will look at a menu of options to see what the way is forward.”

South Africans may soon pay less for their data. Vodacom and MTN must reduce their data price by around 50%.

The commission has found the cost of data is anti-poor and telecommunication giants MTN and Vodacom charge more in South Africa compared to other countries where they operate.

Bonakele added: “Vodacom and MTN must immediately reach an agreement with the commission to seize the ongoing petitioning and priced discrimination strategies that may facilitate greater exploitation against the poor.”

Trade and Industry Minister Ebrahim Patel said data prices must be lowered, as it was the currency of daily communication.

The commission has also recommended that Icasa be strengthened to better provide effective oversight over network providers.

VODACOM REACTS

Vodacom on Monday noted the release of the report by the Competition Commission on data prices and said it was studying the findings.

Vodacom said it was immediately evident that there was a difference in opinion between the Competition Commission and Icasa on a number of critical issues related to data prices in South Africa.

The service provider said it would meet with the commissioner on the matters it raised and comment further in due course.

Vodacom spokesperson Byron Kennedy said: “Vodacom has insistently stated that the delayed spectrum allocation has impacted the rate at which data prices could have fallen. Vodacom has reduced the effect of the price of data by 50% since March 2016. Vodacom will respond to Icasa’s document within the specified timeframe.”

Data Market Inquiry Summary by Janice Healing on Scribd

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