With all three of SA's primary mobile operators now having done an about-turn on the price war and upped their prices, in about as many months, questions around competition, collusion and fairness have been raised. Consumers, however, have no legal recourse.
Yesterday, MTN became the latest operator to announce it would hike prices - for both contracts and prepaid data - with price increases of between 5% and 10% for contract deals and between 3% and 17% for data plans. Like Vodacom, MTN's average price increase is 5%.
ICT expert Adrian Schofield says, while price increases should be expected and operators' terms and conditions allow them to institute these, a question mark hangs over whether the situation was a sign of a truly competitive market.
"I don't want collusion between the operators and I expect the regulator would be watchful of this, but is it coincidence that, within a short space of each other, [the operators] all increased prices? Is that how competition works in the South African environment?"
In mid-2013, the Independent Communications Authority of SA (ICASA) introduced a cost to communicate programme that included - among other measures - a lowering of mobile termination rates (inter-network fees). This has since been implemented, but has become the very thing SA's operators are using, largely, as justification for the recent price hikes.
Inescapable
Although the National Consumer Commission (NCC) and ICASA are not letting the matter lie, all indications are that recent price hikes by Cell C, Vodacom and MTN are inescapable.
Soon after Vodacom announced it would increase prices - a move that came three months after a similar announcement from Cell C and three weeks ahead of MTN's - the NCC started examining the moves to determine whether they were "legal and fair".
At the time, the commission said it was surprised by the price increases. Spokesperson Trevor Hattingh said the NCC took the issue "very seriously" and it would get to the bottom of it by all means possible.
ITWeb has since learnt ICASA has requested information from mobile operators, which the NCC hopes will assist it in the preliminary enquiry it has launched.
Schofield says the price hikes come down to the reality of doing business with shareholders to appease and profits to make, whether consumers agree on the size of those profits or not. "Do we seriously expect the regulators - whether ICASA or the NCC or both - to micro-manage relationships between competitive vendors and their customers?" he questions.
The commission is investigating the facts and merits of complaints it has received ahead of deciding whether to launch a full-scale investigation, although it has been confirmed that, legally, the operators are within their rights to up costs, mid-contract or not.
The NCC says the Consumer Protection Act is silent on material changes to contracts during the currency of a contract. The only choice consumers have, says the commission, is to pay the increased costs to retain the contract, or to pay "exorbitant cancellation penalties".
In the latter case, consumers' options are scarce should they wish to sign up for mobile services elsewhere, given SA's limited mobile virtual network operator landscape and only Telkom Mobile having skipped the price hike trend, for now. Telkom Mobile's best rates also rely largely on on-net services.
SA's operators have justified the price hikes, citing various factors, including termination rates, rising tax, the high petrol price and load shedding.
Yesterday, MTN said it had to invest "substantially" in generators and backup batteries to power its base stations during power outages. "All these cumulative costs have compelled the operator to review its pricing as the last resort."
Share