The Competition Commission has decided not to prosecute a complaint lodged by Cell C against Vodacom and MTN for anti-competitive conduct.
The complaint dates back to 2013, when Cell C alleged Vodacom and MTN engaged in pricing strategies that made it cheaper to make calls between users of the same network compared to calls between people on different networks.
Cell C complained that the price differentials applied by Vodacom and MTN prevented competition and further accused the two companies of excessive pricing, inducement and margin squeeze, according to the Competition Commission statement.
The Commission says due to insufficient evidence it has found it would not be able to successfully prosecute the Cell C complaint.
In the statement, the Commission notes its decision follows a lengthy investigation which revealed that there were several features in the mobile market which affect the ability of smaller mobile operators to compete in the market.
The statement says: "The Commission found that it would be unlikely to succeed in a prosecution of the specific conduct subject to Cell C's complaint. However, there is evidence to suggest that this conduct and other features of the market, in particular the price differentials applied for on-net and off-net calls as well as long-term subscribers' contracts, have made it difficult for late entrants such as Cell C to compete effectively."
It adds, "There is therefore a need to look broadly into the state of competition in the mobile telephony market in South Africa, specifically at the retail level, as the market is still dominated by two mobile market players, years after the licensing of Cell C and Telkom Mobile.
"In this regard, the Commission will engage the Independent Communications Authority of South Africa to explore regulatory interventions that may be necessary to make the market competitive."
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