SA Competition Commission Orders MTN & Vodacom To Reduce Data Prices By 30%-50%

For a significant time now, the price of data in South Africa has been declared as bias against the poor and yesterday the Commissioner of Competition Commission echoed the same sentiments again.

We think there is scope to reduce these prices in the region of 30-50%. We have decided we will give the industry two months to act on these recommendations, failing which we will consider a prosecution for excessive pricing.

Tembinkosi Bonakele

The commissioner referred to MTN & Vodacom as a duopoly with no competition:

There is no significant competitive constraints that the two smaller operators (Telkom and Cell C) provide. Vodacom is a clear leader in this race.

As a result of this concentration and duopoly, we found that data prices in South Africa are excessive. This requires strong and decisive interventions. We have noted that we have seen recent price reductions, but we do recommend that Vodacom and MTN must meet an agreement with the commission on an immediate and substantial reduction in prices, especially of prepaid bundles

Tembinkosi Bonakele

The commission goes as far as ordering all mobile operators in the country to offer subscribers on prepaid packages a lifeline of daily free data to ensure “all citizens have data access on a continual basis, regardless of income levels.”

It’s not clear if the free data will be funded by South African Telecoms Universal Services Fund or is actually being funded by the telecoms operators outside of USF.