CompCom to prosecute operators that fail to reduce data prices

3 Dec 2019

South Africa’s Competition Commission (CompCom) has unveiled a ‘package of recommendations’ in its final report into the data services market, saying that all operators that fail to reach agreements with the authority within the specified timeframes will be prosecuted under the terms of the Competition Act. The report highlighted that the South African telecoms market is ‘highly concentrated’, adding that ‘as a result of this concentration and duopoly, we found that data prices in South Africa are excessive. This requires strong and decisive interventions. We have noted that we have seen recent price reductions, but we do recommend that Vodacom and MTN must reach an agreement with the commission on an immediate and substantial reduction in prices, especially of prepaid bundles.’ The CompCom has given Vodacom and MTN three months to reduce the pricing of their pre-paid data bundles, with the duo advised to ensure the accounting separation of their wholesale networks within six months. The regulator also highlighted that all national roaming agreements must be based on wholesale costs and that prices offered by roaming providers to other operators must be lower than their own retail prices, with annual downward revisions. Further, Telkom’s wholesale arm Openserve must also reach an agreement with the CompCom on ‘substantial price reductions’ for IPConnect to reduce ‘excessive pricing concerns that are highlighted in the main report’. The CompCom also claims that there must be cost-based access to network facilities, with ICASA given 18 months to define essential facilities so that access and pricing for these can be regulated.