Connecting Africa is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.

Digital Inclusion

SA Competition Commission Forcing MTN & Vodacom to Cut Data Prices

Article Image
South African operators MTN and Vodacom must reduce mobile data prices immediately or face prosecution from the country's Competition Commission (CompCom).

This is breaking news out of Pretoria as the CompCom on Monday afternoon released its final recommendations as part of its Data Services Market Inquiry, which began back in August 2017.

"Vodacom and MTN must independently reach 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%," the inquiry report reads.

Competition Commissioner Tembinkosi Bonakele then went even further, saying that a failure to reach an agreement with the commission, within two months, would lead the commission "to consider going ahead with prosecution for excessive pricing or other exclusionary abuse before the Competition Tribunal."

South Africa Competition Commissioner Tembinkosi Bonakele
South Africa Competition Commissioner Tembinkosi Bonakele

The final report follows the competition watchdog's provisional findings of the inquiry into data prices, which was released back in April. (See It's Official — South Africa Data Prices Are Too High.)

The CompCom maintains, as it did in the provisional report, that SA data prices are too high and believes that the market is dominated by Vodacom and MTN.

The Commission's final report also recommends that Vodacom and MTN must specifically reduce the headline prices of all sub-500 Mbytes 30-day prepaid data bundles so that they are in line with the per-Mbyte pricing of 500 Mbytes bundles that contract customers pay "as well as the cessation of partitioning strategies that contribute to anti-poor pricing and/or inferior service outcomes."

The CompCom said that price-based competition is inadequate in South Africa and "the challenger networks of Cell C and Telkom Mobile are unable to effectively constrain the two first-movers, and that Vodacom has substantial market power, with MTN to a lesser degree."

The Commission also believes that "poorer consumers in South Africa are being unduly exploited relative to wealthier consumers" and that current "pricing structures are anti-poor and lack transparency."

— Paula Gilbert, Editor, Connecting Africa

Innovation hub


Deep dive into East Africa's tech startup ecosystem

New survey reveals a lack of access to investors, reliance on international VCs and global recession trends as the biggest barriers for East African tech startups to access funds.


Podcast: What's the Story? African tech startups score $3.3B in funding

Connecting Africa's Paula Gilbert joins this Light Reading podcast to explain why the fintech sector is bringing in the most funding, which countries are leading the way for most funding and what these trends mean for the continent as a whole.

More Innovation hub

Sponsored video

More videos

Flash poll

All polls

Latest video

More videos

Africa Tech Perspectives


Deep dive into East Africa's tech startup ecosystem

New survey reveals a lack of access to investors, reliance on international VCs and global recession trends as the biggest barriers for East African tech startups to access funds.


Challenges and opportunities for women's tech careers

A new survey reveals that COVID-19, the cost-of-living crisis, skills shortages and a lack of mentorship have negatively affected women's career development over the past two years.


Survey: Opportunities for Women in Tech

Take our new survey for women across Asia, Europe and Africa looking at the biggest challenges and opportunities for women-led enterprises and trends in tech careers for women.

More AfricaCom perspectives

Guest Perspectives


Omdia View: July 2022

By Omdia Analysts

Kenya and Zambia move towards 5G with new spectrum allocations while Tunisie Telecom plans to shut down its 3G network - that and more in this month's Omdia View.


Omdia View: June 2022

By Omdia Analysts

5G was the major news trend across Africa in June, as Orange became the first operator to launch 5G in Réunion and operators in Senegal accelerated their 5G plans despite spectrum delays.

More Guest Perspectives

Industry announcements

More Industry announcements

Partner perspectives

All Partner Perspectives

Like us on Facebook

Newsletter Sign Up

Sign Up