Competition Commission launches investigation into data prices

The Competition Commission will conduct a market inquiry into data services in South Africa.

“The purpose of the inquiry is to understand what factors or features of the markets and value chain may cause or lead to high prices for data services, and to make recommendations that would result in lower prices for data services,” it said.

This comes after Telecommunications Minister Siyabonga Cwele said high mobile data prices may need to be brought before the Competition Commission.

National Treasury then directed the Commission to investigate data prices.

The Commission is looking to identify areas where customers or consumers may be exploited or excluded.

It also wants to identify structural, behavioural, or regulatory factors that may influence competition or pricing.

The assessment will include:

  • Market structure.
  • The adequacy and impact of the regulatory regime.
  • Strategic behaviour by large fixed and mobile incumbents.
  • Costs faced and profits earned by fixed and mobile network operators.
  • Current arrangements for sharing of network infrastructure.
  • Investment in infrastructure by operators and access to spectrum.
  • The adequacy of regulation to promote new South African entrants, particularly historically-disadvantaged individuals.

The Commission will also benchmark South African data services pricing against those of other countries, and will establish whether data supply quality and coverage is adequate by international standards.

It said the outcome of the market inquiry will be to make recommendations on the following matters:

  • Recommendations to government as to how the market could be made more competitive and inclusive, and how data prices can be brought down.
  • Recommendations to the sector regulator on the competitive impact of the regulatory framework, and any need for amendments.

The inquiry will be carried out primarily by the Commission and will commence on 18 September 2017. It is likely to be completed by 31 August 2018.

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Competition Commission launches investigation into data prices