Mobile operator MTN says it “respectfully disagrees" with the recommendations made by the Competition Commission (CompCom) on data price cuts in SA.
The operator today issued a statement on the Johannesburg Stock Exchange after the commission on Monday announced the release of final findings and recommendations for the data services market inquiry.
The inquiry was initiated by the commission in August 2017. This followed persistent concerns expressed by the public about the high level of data prices and the importance of data affordability for the South African economy and consumers.
Among other findings, the competition watchdog reported that current comparisons of the prices charged by Vodacom and MTN in other African markets in which they operate reveal that South African prices are higher than most countries by some distance.
It also found Vodacom and MTN’s pricing structures are anti-poor and lack transparency. Poorer, low-volume customers face higher per megabyte prices than richer, high-volume consumers on a like-for-like basis, it said.
The commission then made recommendations for immediate relief on data pricing, focusing on the level and structure of pricing.
These include requirements for MTN and Vodacom to reach agreement with the commission on reductions to the level of pricing and changes to the structure of pricing and pricing strategies that facilitate greater exploitation. There is scope for price reductions in the region of 30% to 50%, it said.
The commission also called for agreement across operators for a commitment to offer all prepaid subscribers a lifeline package of daily free data to ensure all citizens have data access on a continual basis, regardless of income levels as well as an industry-wide approach to zero-rating of content from public benefit organisations.
However, MTN is not happy with the recommendations.
In its statement, it says it has noted the release of the Competition Commission of South Africa’s summary report on the final findings of the data services market inquiry, released on Monday, 2 December.
The mobile operator points out that the detailed report from the Competition Commission is yet to be released.
“We are currently studying the summary report and will not be able to comment in more detail until we have seen the full document. We are also reviewing the ICASA [Independent Communications Authority of SA] discussion document released last Friday.
“We reiterate comments made earlier in the year that MTN South Africa has substantially reduced the effective price of data in South Africa, having also invested heavily in the network to accommodate growing data demand with limited spectrum availability.”
MTN Group has invested over R50 billion in the South African network in the last five years and has pledged a further R50 billion of investment over the next five years as part of delivering a world-class network for all South Africans, the company says.
“We remain committed to providing high quality, affordable data and connectivity to our customers in all our markets. We will continue with our pricing transformation initiatives across all our markets to make our services more affordable for customers.
“Radio spectrum is the digital highway upon which we depend to carry increasing mobile data at more cost-effective prices.”
It explains this is acutely felt in SA, which has among the lowest spectrum allocation in all MTN markets.
The release of new spectrum in this market will greatly assist the ability to service more customers with more data traffic, the company says.
“We respectfully disagree with the analysis and recommendations contained in the summary report and, as we study the full report, will continue to engage constructively and vigorously defend against over-broad and intrusive recommendations,” it concludes.
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