South Africans pay more for data than in
other countries where their service providers operate, and those companies are
“More than capable” of reducing prices, the
Competition Commission said.
According to @timeslive. Two years ago,
amid a public outcry about high data prices and providers' apparent inability
to allow customers to carry about unused data, an investigation was launched.
That Data Services Market Inquiry report was released on yesterday.
The report said that current comparisons of
the prices charged by Vodacom and MTN, the two big mobile providers in SA, in
other African markets in which they operate revealed that SA prices are higher
than most countries by some distance, even Lesotho, where Vodacom is the
effective monopoly provider. In response, Vodacom and MTN have argued that such
comparisons are uninformative because the cost and quality differences across
countries, including spectrum allocations, may account for the differences in
pricing. They have also argued that such comparisons involve headline 30-day tariffs
and that effective price, including promotions, short-validity bundles and free
data, is a better basis for comparison. “The existing international comparisons
on mobile prepaid data prices collectively indicate that SA currently performs
poorly relative to other countries, with prices generally on the more expensive
end. “Upon the release of the report, trade and industry minister Ebrahim Patel
said data prices were critical to the economy.
“The prices are higher than they should be
and higher than any other markets elsewhere in the world. The profitability
levels are high, reflecting anticompetitive outcomes. This may be the subject
of an excessive-pricing investigation,” he said.Patel added that the roaming
markets were not working, or not working as well as they should.
“The 21st century is being reshaped by
data. If we want to grow the economy, we need to have the lowest possible data
prices,” he said.
The commission also cited a challenge for
new entrants like Cell C to compete on a fair footing.
“The constant battles Cell C has had with
its debt levels and equity refinancing about an extended period are reflective
of precisely this challenge for the newer networks. Its current financial woes
only serve to highlight this difficulty entrant’s face,” said the report.
The report says MTN and Vodacom must reach
an agreement with the commission on substantial and immediate reductions on
tariff levels. Especially prepaid monthly bundles, within two months of the
release of the report. The preliminary evidence suggests that there is scope
for price reductions in the region of 30% to 50%.
Second, all mobile operators must reach an
agreement with the commission within three months to inform each subscriber, on
a monthly basis, of the effective price for all data consumed by the customer.
Among the recommendations was that should
an operator fail to reach the required agreements with the commission within
the specified time frames, the commission will proceed to prosecution.
