The Competition Commission released its Data Service Market Inquiry report recently, which drew sharp criticism for its mobile data recommendations.
The report said there is scope for Vodacom and MTN to cut their mobile data prices by 30% to 50% and that it is looking to force the operators to reduce their prices.
The Commission further said that all mobile operators must offer South Africans on prepaid packages “a lifeline package of daily free data”.
Vodacom and MTN must also independently reach an agreement with the Commission within two months on a reduction in the headline prices of all sub-500MB 30-day prepaid data bundles.
It added that Vodacom and MTN must “cease ongoing partitioning and price discrimination strategies that may facilitate greater exploitation of market power and anti-poor pricing”.
Report slated by stakeholders
These interventions were slated by stakeholders who warned that they will do more harm than good.
Vestact CEO Paul Theron said the Competition Commission’s recommendations is threatening to undermine the telecoms industry, destabilise it, and scare off future investment.
Telkom CEO Sipho Maseko concurred with Theron, saying the Commission’s price recommendations could severely harm the industry.
Maseko said price regulation is an ineffective instrument and may ultimately have unintended and deleterious consequences on employment and future levels of investment.
African Rainbow Capital (ARC) CEO Johan van der Merwe said the Commissions’ recommendations could do serious damage to business.
According to Van der Merwe, the government should focus on increasing competition instead of interfering in cellphone data prices.
The best Competition Commission recommendations
The Commission’s view on Vodacom and MTN’s high mobile data prices dominated media reports, which means other recommendations did not receive much coverage.
The report contains a few recommendations which will help the industry and bring more affordable data to South Africans.
Here the recommendations which should be embraced and implemented to drive broadband adoption in the country.
- Support fibre-to-the-home (FTTH) rollouts – The national government should consider providing investment incentives to FTTH providers for network roll-out in low-income areas. These may take the form of tax breaks or financial support.
- Free public Wi-Fi – The government at all levels must actively promote the development of free public Wi-Fi in low-income areas, including government buildings, commuter points, and public spaces, and the creation and entry of community networks.
- Use spectrum – ICASA must consider models and regulatory changes to allow at least non-profit community networks and possibly small commercial enterprises to access licensed spectrum not used by mobile operators in rural areas in a similar manner to television white space.
- One agency to drive initiatives – A single government department or agency must be designated as responsible for driving these initiatives across the different departments and levels of government.