Vodacom and MTN must cut prices by 50% and give users free data

The Competition Commission has published a final report on its Data Service Market Inquiry.

When it comes to mobile data prices, the Competition Commission stated that the biggest mobile operators in the country – Vodacom and MTN – must drop their prices.

“The preliminary evidence suggests that there is scope for price reductions in the region of 30% to 50%,” stated the report.

“Vodacom and MTN must independently reach agreement with the Commission within two months on a reduction in the headline prices of all sub-500MB 30-day prepaid data bundles to reflect the same cost per MB as the 500MB 30-day bundle, or cost-based differences where such cost differences have been quantified, as well as the cessation of partitioning strategies that contribute to anti-poor pricing and/or inferior service outcomes.”

“Given their collective market position, adjustments to their prices should impact on market-wide pricing.”

Access to free data

The Commission prefaced this statement with the assertion that “access to affordable data is of paramount importance for economic and social inclusion”.

“The full implementation of the package of remedies is also essential to provide the necessary building blocks for South Africa to participate fully in the Fourth Industrial Revolution and take advantage of the opportunities that revolution presents,” said the Commission.

It went on to state that all mobile operators must offer South Africans on prepaid packages “a lifeline package of daily free data”.

This is to “ensure all citizens have data access on a continual basis, regardless of income levels”.

“This agreement must then be given formal legislative or regulatory effect within six months. This may include the ICASA End-User and Subscriber Charter Regulations, spectrum licensing conditions or planned amendments to the ECA,” it stated.

The level of lifeline data and any annual adjustments should be determined in consultation with the industry, it said.

All mobile operators must also reach an agreement within three months on an industry-wide approach to the zero-rating of content from public benefit organisations and educational institutions.

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Vodacom and MTN must cut prices by 50% and give users free data