The Competition Commission has confirmed it is investigating the country's mobile operators for collusion, despite having cleared them of the accusation a month ago.
Speaking to ITWeb yesterday, Keith Weeks, head of the commission's Enforcements and Exemptions Division, says the authority may call the cellular operators in to explain themselves on charges of collusion. He says that, some time ago, the commission subpoenaed a large amount of documentation from role-players within the industry.
Now the commission is studying the paperwork to determine if there has been any price-fixing among the mobile companies.
This is despite the fact that, during hearings held by the Parliamentary Portfolio Committee on Communications, in September, Competition Commission commissioner Shan Ramburuth said there was no evidence of collusion between the operators.
Ramburuth was referring to agreements made between operators on interconnect fees and the issue was raised again last week, when the commission faced the committee again to explore high interconnect rates between the operators.
At last week's hearings, the commission contradicted the September statement, saying the mobile operators were anticompetitive and reiterated that an investigation was under way.
However, Weeks says the two investigations are separate, and the new investigation is looking at other agreements that the mobile operators may have in place. “The interconnection agreement was not collusive, although it may have anti-competitive consequences.”
Weeks explains that the initial fees were a bilateral agreement between MTN and Vodacom, and sanctioned by the Independent Communications Authority of SA (ICASA). He says the fact that there was a market failure since is an issue for the regulator.
A long time ago
The commission is conducting ongoing investigations into the mobile operators' behaviour and has already faced complaints about why it has taken so long to reach a conclusion.
Earlier this year, the commission explained that jurisdictional issues between itself and ICASA had kept it from properly investigating possible anticompetitive behaviour by the operators. However, Weeks says allegations of collusive behaviour by the mobile operators are by nature difficult to investigate.
The jurisdictional trouble between the two authorities is well known and, while ICASA and the Competition Commission came to an agreement on who should prosecute what in 2002, the parties have not been able to take on the high cost of communication in the country.
According to Weeks, the investigation - which has taken more than four years - is tricky because it deals with collusion. “Under the commission's leniency offering, a company can come forward and offer evidence in exchange for immunity but, so far, this has not happened,” explains Weeks.
He adds that, when the initial interconnect fee was agreed upon by Vodacom and MTN, it was a bilateral agreement and may have resulted in an anticompetitive environment, but - in itself - the agreement was not collusive, as ICASA allowed it. Weeks explains that, should ICASA rule on interconnection, this will automatically remove the anticompetitive results of the termination fee.
Pleading innocent
Meanwhile, operators are adamant they have not been involved in anything untoward.
“Vodacom is not involved in any anticompetitive behaviour, and can confirm that it has not received any communication from the Competition Commission,” the company said in a statement.
Likewise, MTN says it is innocent and had no idea the investigation was under way at the commission. “MTN has not been advised by the Competition Commission of any new complaints or investigations relating to interconnection, as suggested by news reports today. MTN denies that it has engaged in collusive conduct relating to interconnection.”
However, the company says it is aware of the three complaints laid against the operators four and five years ago. “The Competition Commission has investigated three complaints against mobile operators, including MTN, relating to interconnection. MTN denies there is any merit in these complaints, and the Competition Commission has not instituted any action against MTN pursuant to the complaints.”
Cell C is also oblivious to possible collusion complaints; however, it too has decried its innocence. “Cell C has not been approached by the Competition Commission and we can confirm thatwe are not involved in anticompetitive practices.
The operators and the commission will once again face the Parliamentary Portfolio Committee on Communications today to hear its verdict on the future of interconnect.
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