While there is no sign of active collusion in setting interconnection rates, the mechanisms are in place to make such collusion unnecessary, the Competition Commission told Parliament yesterday.
Speaking during the Parliamentary Portfolio Committee on Communications' hearings into mobile interconnection rates, Competition Commission commissioner Shan Ramburuth said, in the cases examined by his commission, there was no documented proof of collusion or anti-competitive behaviour.
However, he pointed out, the dominance of MTN and Vodacom in the market meant the interconnection rate they set became the tariff for the entire market. There were other means by which anti-competitive behaviour could have been agreed to, he noted.
These include the forum set up by telecommunications regulator ICASA, whereby the network operators gather to discuss industry issues. “One never knows what is said or agreed to during tea times at these gatherings,” he pointed out.
Communications committee chairman Ismail Vadi asked why the minutes of these meetings were not made public. “Surely, if they are made public then we can see what issues are discussed and just how friendly ICASA is with the industry?”
During the Competition Commission's presentation, it said market failure in call termination requires a direct “ex-ante” remedy such as price control, but that the Competition Act does not allow for this only “ex-post” (after the fact) intervention.
It said there is a need for strong regulatory intervention and that ICASA should conduct a thorough market study, consistent with requirements of the Electronic Communications Act. It added that ICASA must be given the opportunity to determine appropriate cost-oriented levels for call termination rates.
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