Cell C wants roaming discounts to compete with MVNOs

Cell C has said it wants network roaming agreements with reasonable discounts to form part of pro-competitive remedies aimed at addressing the structure of the mobile broadband market in South Africa.

These comments came during the company’s presentation at ICASA’s public hearings on its Discussion Document on the Market Inquiry into Mobile Broadband Services.

This document sets out ICASA’s preliminary views on the definition of relevant mobile broadband services markets and the effectiveness of competition within these markets.

It comes on the back of the Competition Commission’s own Data Market Inquiry, which made a number of findings regarding mobile data prices in South Africa – including one which forced Vodacom and MTN to reduce their data prices earlier this year.

During its response to ICASA’s document, Cell C claimed that in future the competitiveness and cost structures of Cell C and Mobile Virtual Network Operators (MVNOs) will directly depend on the services provided and input costs for voice and data usage charged by national roaming providers.

It further said the market for roaming is not competitive, with only Vodacom and MTN able to provide national roaming.

Competition with MVNOs

Given that these mobile network operators will likely be mandated to provide MVNO access as part of their future high-demand spectrum conditions, Cell C is concerned that they will provide MVNOs access at prices lower than roaming rates provided to roaming partners such as itself.

It claimed this would hamper competition in the MVNO market, an outcome which should be prevented.

Cell C said it agreed with one of the Competition Commission’s Data Market Inquiry findings regarding roaming agreements.

This finding stated that Vodacom and MTN must reach an agreement with the Commission to ensure their national roaming agreements with other networks are priced, at a minimum, at wholesale rates which reflect a reasonable discount on their own effective retail rates as measured by the average revenue per GB.

Furthermore, this has to include provisions for annual downward revisions to reflect reductions in their own effective retail rates.

These minimum pricing standards should ultimately be incorporated into the amendments to legislation with powers for ICASA to regulate roaming agreements.

Cell C network shutdown

Cell C’s representations come as it is in the process of moving entirely onto MTN’s network while it is switching off its own radio access network.

This infrastructure sharing strategy will help Cell C to cut down on network investments and still get the benefit from an excellent service through a roaming agreement with MTN.

With Cell C switching off its full radio network and moving to “a virtual network provided by MTN”, many people view it as a super MVNO (mobile virtual network operator).

Cell C CEO Douglas Craigie Stevenson dismissed this view, saying apart from not having a radio access network, they remain a fully-fledged mobile operator.

He said Cell C will still maintain a core network and can still choose to increase or decrease its coverage footprint.

It also has control over network quality, it remains a spectrum license holder, and controls its network investment.

Now read: Interfering with mobile data prices is a bad idea – Vodacom

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Cell C wants roaming discounts to compete with MVNOs