South Africa’s Competition Commission has decided to ‘non-refer’ (not to prosecute) a complaint lodged by Cell C in October 2013 against Vodacom and MTN for anti-competitive conduct, citing a lack of sufficient evidence to proceed. Cell C had alleged that Vodacom and MTN engaged in pricing strategies that made it cheaper to make on-net calls than off-net calls. In particular, Cell C 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. Despite what it has termed a ‘lengthy investigation’ the Commission has found that it would be unlikely to succeed in a prosecution of the specific conduct subject to Cell C’s complaint.
Going forward, the Commission has conceded that there is a need to look broadly into the state of competition in the mobile telephony market in South Africa, specifically at the retail level, as the market is still dominated by two mobile market players, many years after the licensing of Cell C and Telkom Mobile. In this regard, the Commission says that it will engage the Independent Communications Authority of South Africa (ICASA) to explore regulatory interventions that may be necessary to make the market competitive.