Vodacom and MTN must drop mobile data prices significantly, failing which the Competition Commission will consider prosecuting the two companies.
That’s the warning from commissioner Tembinkosi Bonakele, who was speaking at the commission’s release of its final report into the data services market.
Bonakele said the two operators charge too much for mobile data services, particularly when it comes to prepaid access. “This reflects a bias against the poor,” he said.
Bonakele said the final report found that South Africa’s telecommunications market is “highly concentrated” for data services in the hands of MTN and Vodacom.“We think there is scope to reduce these prices in the region of 30-50%. We have decided we will give the industry two months to act on these recommendations, failing which we will consider a prosecution for excessive pricing.”
“There is no significant competitive constraints that the two smaller operators (Telkom and Cell C) provide. Vodacom is a clear leader in this race,” he said.
“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 meet an agreement with the commission on an immediate and substantial reduction in prices, especially of prepaid bundles.”