Vodacom and MTN make it impossible for us to compete – Telkom

Telkom is complaining that Vodacom and MTN’s first-mover advantage has made it impossible for other mobile operators to “play in this space”.

Speaking to CNBC Africa, Telkom group executive of regulatory affairs Siyabonga Mahlangu said other operators are prevented from monetizing their spectrum effectively.

“At this point, the two incumbents, because of their first-mover advantage, have made it impossible for other players to play in this space,” he said.

He added that the Competition Commission founded that Vodacom and MTN dominate the market because of their first-mover advantage and earlier policies which supported them.

Mahlangu also dismissed arguments that Telkom has more spectrum than other players which gives it an advantage in the market.

He said all spectrum is not equal, highlighting that Telkom is the only operator which does not have sub-1GHz spectrum.

“This means that Telkom does not have spectrum which you need to cover a large area with fewer base stations,” he said.

“This has enormous implications for Telkom’s capital investments and its ability to compete.”

He added that the spectrum discussion cannot be restricted to Megahertz only and should include the size of your network and the number of subscribers you have.

Spectrum deals should be investigated

Mahlangu bemoaned the recent spectrum deals where Rain, Cell C, and Liquid Telecom partnered with Vodacom and MTN to monetize their spectrum.

These spectrum deals, Mahlangu argues, show that “fundamentally there is a problem with the structure of this market”.

He said the later mobile entrants do not have room to monetize their spectrum effectively because of the barriers to competition which currently exist.

He added that ICASA cannot license new spectrum with analyzing and scrutinizing the spectrum deals and their implication on the future of competition.

“If ICASA does not analyze these transactions it will pre-empt the competitive landscape in the future,” Mahlangu said.

Vodacom and MTN respond

Vodacom dismissed Telkom’s claim that new entrants cannot compete in the market, saying the South African mobile market has a healthy level of competition.

“This competition has ultimately benefited consumers with wider coverage, faster speeds, and a significant decline in tariffs,” Vodacom said.

MTN SA spokesperson Jacqui O’Sullivan told MyBroadband that the South African telecommunications market is evolving in line with global trends.

O’Sullivan said mobile operators are moving into fixed-line, and fixed-line operators are moving into mobile.

To focus on only a single market segment, which Telkom is now doing with the mobile market, is therefore misleading.

“Right now, all four operators are actively competing across all these services and technologies.”

Now read: Vodacom and MTN respond to Telkom attack

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Vodacom and MTN make it impossible for us to compete – Telkom