The Independent Communications Authority of SA (ICASA) is holding public hearings on mobile prices on 18 and 19 May.
The hearings are part of the regulator`s investigation to establish whether the high costs of mobile services are justifiable and if there is a need for more rigorous regulatory oversight of mobile tariffs, ICASA says. The investigation came about as a result of a complaint by the Communications Users Association of SA (CUASA).
In their written submissions, CUASA, the Competition Commission and the South African Contact Centre Community say the high mobile prices in SA indicate there is insufficient competition in the mobile market.
"What we have in SA is the facade of competition in the form of firms contesting vigorously through advertising, marketing and distribution outlets," the commission says.
Untested propositions
However, the mobile operators question the need for ICASA to investigate mobile prices, as well as the manner in which it is conducted. Cell C says ICASA is conducting an enquiry on specific economic and pricing issues, based on untested propositions and unsubstantiated assumptions. MTN says the regulator must first conduct an economic analysis to determine if there is enduring market failure before deciding to intervene.
"Any kind of price intervention, especially if the intervention seems to be heading on a cost-orientation basis, requires the establishment of a durable market failure and is an intervention of the last resort," MTN says.
Vodacom adds that the high take-up rate of mobile services indicates the overall combination of service quality, coverage and price are attractive to consumers.
Suggested solutions in the submissions include the awarding of a licence to a fourth mobile operator, introducing mobile virtual network operators, and a dramatic and immediate reduction of interconnect tariffs for all calls.
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