The Competition Commission has called for the Independent Communications Authority of SA (ICASA) to license a fourth mobile operator, in a discussion document submitted ahead of the upcoming ICASA hearings into mobile tariffs.
"The Telecommunications Act provides for the introduction of a fourth mobile operator," the commission says in its submission.
Competitive pricing is lacking in the South African market, it notes, adding that Hong Kong has six mobile operators, serving seven million subscribers, against SA`s 20 million subscribers.
Facade of competition
"What we have in the South African market is the facade of competition, but what is sadly missing in the midst of all the hype and complex offerings is real substantial competition that benefits consumers," it states.
The commission submits that price regulation of prepaid services would not be justified in a sector with three players. Instead, competition must be stimulated and promoted, and the introduction of number portability should be accelerated, it adds.
"Mobile prices in SA have the potential to drop to reasonable levels - what that level is will be determined by a competitive market."
'No benefit`
The Communication Users Association of SA (CUASA), while agreeing the tariffs are too high, states in its submission to ICASA that it sees no benefit in introducing a fourth operator.
"The introduction of the third mobile operator (Cell C) had little effect on driving down prices; and as over 50% of the population are reported to now have mobile phones, we have doubts whether any significant portion of the remaining market could be captured by a fourth entrant."
CUASA adds that convergence and innovation will blur the lines between fixed and mobile operators, making the awarding of new mobile licences "impractical".
"We therefore do not believe that the introduction of a fourth operator is feasible, but rather that real and effective competition between existing operators should be enforced by ICASA."
Mixed feelings
The three existing cellular operators have mixed feelings on the Competition Commission`s call for a fourth operator.
"Vodacom has in principle no objection to the licensing of a fourth cellular operator," it says in its submission. However, it cautions that in deciding whether to license a fourth operator, ICASA will need to consider the competitive benefits from having additional operators, the sustainability of competition and the implications for industry costs.
MTN says it is "very concerned by the question [of whether there is a need to introduce a fourth player] as SA is about to be hit by an unprecedented wave of new competition, both infrastructure and non-infrastructure-based".
Cell C suggests a market study be carried out into the level of competition in the market.
VOIP`s potential
The Competition Commission does not believe voice over Internet Protocol (VOIP) telephony will ease the alleged lack of competitiveness in SA`s mobile sector.
"It is difficult for small and medium enterprises and private individuals that have no large IT departments to make use of VOIP," its submission says.
The cost and availability of VOIP-enabled handsets also hampers its competitiveness potential, it adds.
For the full submissions, see:
Full CC submission
Full CUASA submission
Full Vodacom submission
Full MTN submission
Full Cell C submission
Related stories:
Tariff hearings due after March
ICASA cell cost hearings delayed
Share