MTN is on injury time for data price cuts – Competition Commission
MTN is next in the Competition Commission’s firing line after the Commission successfully negotiated with Vodacom to lower its monthly data bundle prices.
Speaking to media at the announcement of a settlement between the Commission and Vodacom, commissioner Tembinkosi Bonakele said talks are ongoing with other mobile operators regarding the findings of the Data Service Market Inquiry report.
The report, which was published in December 2019, called for price cuts to be implemented by Vodacom and MTN and directed Telkom to lower the price of IP Connect.
“We were hoping that this week we would be announcing all of those agreements,” Bonakele said. “We are aware that we need to conclude this.”
“The issue is that if we do not conclude the agreements we are going to need to go back to the litigation process.”
“MTN and Telkom are on injury time,” he said. “I think you should hear from us within the next two weeks about the outcome of the MTN and Telkom negotiations.”
He added that as far as the findings of the report were concerned, the Commission’s agreement with Vodacom brings its matters with the mobile network to an end.
Vodacom data bundle price cuts
Vodacom and the Competition Commission signed an agreement on 10 March 2020 which would see the mobile operator reduce the price of its monthly data bundles by up to 40% over a two-year period.
“On price reductions, Vodacom has agreed to a multi-year substantial reduction of monthly data bundles across the board,” Bonakele said.
“Effective from 1 April 2020, prices will come down by over 30% across all channels. For example, the key 1GB monthly bundle will drop from R149 to no more than R99 per GB.”
This represents a 34% price decrease, which will be followed by a further price decrease on the same date next year.
Vodacom CEO Shameel Joosub said the company agreed to the mobile data price cuts in the hope that new spectrum would be allocated this year.
“We make this move proactively in the hope that spectrum will be allocated this year,” he said.
“The spectrum delays do not affect the agreements that have been made. The trust factor for Vodacom is ‘drop the prices and spectrum will come’.”
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