MTN to oppose regulator’s recommendations on data costs

Says it will defend against ‘over-broad and intrusive recommendations’ as it studies the full report.
The CompCom on Monday instructed telecommunications companies MTN and Vodacom to lower their data costs within the next two months or they could face prosecution. Image: Moneyweb

South African telecoms group MTN said on Wednesday it would “vigorously” oppose recommendations of the Competition Commission after the regulator instructed MTN and rival Vodacom to lower data prices.

“We respectfully disagree with the analysis and recommendations contained in the summary report and, as we study the full report, (we) will continue to engage constructively and vigorously defend against over-broad and intrusive recommendations,” it said in a statement.

On Monday, Competition commissioner Tembinkosi Bonakele said Vodacom and MTN could face prosecution if they do not agree to cut data prices in the next two months. This followed the findings of a data services inquiry launched in August 2017 which showed prices charged by the operators were higher in South Africa than in other African markets in which they were operating.

Read: ‘Data prices must fall!’ – Competition Commission

The same was true when comparing local data costs with those outside Africa, Bonakele said.

Vodacom and MTN have argued that such comparisons are uninformative because cost and quality differences across countries, including spectrum allocations, may account for the differences in pricing.

On Wednesday, MTN said its local unit has substantially reduced the effective price of data and the group has also invested over R50 billion in the South African network over the last five years to accommodate growing data demand with limited spectrum availability.

It added that it has also pledged a further R50 billion of investment over the next five years.

Vodacom spokesman Byron Kennedy said on Monday Vodacom had reduced its effective data price by about 50% since March 2016.

Read: Vodacom says data price cuts affected by delayed spectrum allocation

The Federation of Unions of South Africa welcomed the findings of the Commission and called on Vodacom and MTN to implement them with immediate effect, though it acknowledged the challenge that lack of additional spectrum has on costs.

Telecom companies have said it is wrong to lay the blame for the country’s data costs on operators, arguing the greatest hurdle to data pricing reduction remained spectrum allocation, for which the government is responsible.

“The release of new spectrum in this market will greatly assist our ability to service more customers with more data traffic,” MTN said, adding that South Africa has amongst the lowest spectrum allocation in its markets.

South Africa’s President Cyril Ramaphosa told an investment conference in November that his government had started the process of releasing high-demand broadband spectrum and that a policy framework had been published.

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“South Africa’s President Cyril Ramaphosa told an investment conference in November that his government had started the process of releasing high-demand broadband spectrum…”

[Rubbing hands] let there be more spectrum. 🙂

Why is MTN’s initial reply is to oppose when,according to this article they are still studying the report?
Sounds a bit premature to me.So they are going to ignore any facts,if any,in the report it seems.

MTN has jumped the gun and is on a collision course with the Competition Board it seems.
Both operators make hugh profits on data sales at the expense of ordinary citizens. And they have been requested to lower data costs on numerous occasions. They continue with practices to “limit” the rollover of data in cases where all the data is not used.
Data fees must fall!

End of comments.

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