We are not anti-competitive, say cellular operators

Vodacom and Cell C deny engaging in any anti-competitive practices; MTN mum on the issue

Independent Democrats leader Patricia de Lille recently complained to the Competition Commission about the high costs of mobile phone calls in South Africa.  De Lille called on the commission to investigate, "whether the operators, particularly the dominant players, are acting anti-competitively or are guilty of any prohibited practices".

"In my letter I have shown why we as South Africans should be suspicious of the exorbitant costs of the cell phone calls we make," De Lille said on Wednesday.  "South Africa has some of the highest mobile telephone call costs in the world, and I believe there are sufficient alarming markers to warrant an urgent investigation by the Competition Commission."

De Lille pointed to the high interconnection rates and Vodacom and MTN’s dominance in the market as reasons for the Competition Commission to investigate the cellular operators for anti-competitive practices.

Vodacom responds, MTN mum

Vodacom said that it is aware of the submission made by De Lille to the Competition Commission, but added that it “does not believe it is appropriate to make any comments on her submission at this stage.”

Vodacom did however say that it “is certainly not involved in any anti-competitive behaviour, and has and will continue to extend its full co-operation to the Competition Commission on any investigation into the telecommunications industry.”

MTN did not respond to requests for information as to whether it is acting anti-competitively, and would not comment on whether the mobile operators are acting as a cartel.

Neither Vodacom nor MTN would comment on whether South Africa’s mobile phone calls are of the highest in the world as indicated by De Lille.  The two companies would also not answer questions as to why their per-minute voice rates and data prices are either the same or very similar.

Cell C wants lower prices

Cell C has openly stated that MTN and Vodacom’s high interconnect rates are making it very difficult to compete, something which Cell C reiterated with De Lille’s complaint. 

“Cell C fully supports lower retail rates to consumers but it needs to be remembered that the interconnection rate is a significant input cost in the retail rate,” said Leona Mentz, Cell C’s Head of Regulatory Compliance.  “As previously stated, MTN and Vodacom increased the interconnection rates by 500% when Cell C came to market and that essentially affected the retail price.”

“The sector regulator ICASA has commenced with a process of market regulation which has been delayed and is not yet finalized.  Market regulation could also assist in reducing interconnection rates which may result in lower retail rates to the benefit of consumers,” said Mentz.

Cell C committed to respond to any enquiries from the Competition Commission, and said that the company has not and is not engaging in any anti-competitive behavior.

Cellular operators anti-competitive?  Give your views