CompCom distances itself from MTN data price cuts

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The Competition Commission (CompCom) has distanced itself from MTN SA’s data cost reduction proposal announced last week, saying it was a “unilateral commercial response”.

The competition watchdog says there is no agreement between itself and MTN.

On Friday, MTN announced data price cuts with a reduction on its monthly bundles of 1GB and below by between 25-50%, while the 1GB monthly bundle will decrease by 33% to R99.

The telco added it will also now offer lifeline data to its South African customers, providing subscribers with 20MB of free data daily – or the equivalent of 600MB per customer every month – through its instant messaging platform, Ayoba.

MTN SA said Ayoba currently has 500 000 customers in South Africa and is expected to continue to scale through the lifeline offering.

Godfrey Motsa, MTN SA CEO, explained: “MTN believes that everyone deserves the benefit of a modern connected life and that starts with connectivity. The 20MB Ayoba Data Lifeline will ensure MTN customers are able to communicate with friends and family, every day, even when they are out of airtime. This is the equivalent of 600MB of free data per month, every month.”

However, in a statement to shareholders, the telco cautioned that: “MTN remains in discussion with the CompCom on the options to formalise these elective solutions.”

Now, CompCom spokesperson Sipho Ngwema tells ITWeb: “Any failure to adhere to those recommendations is a sticking point to us.”

Ngwema explains: “This was a unilateral commercial response by MTN. It’s apparent that MTN had to respond to changes in the market as a result of our agreement with Vodacom.

“We do not have an agreement with MTN and any suggestion to the contrary is false.”

In December, the CompCom recommended that MTN and Vodacom reduce their mobile data pricing by half.

The CompCom, which had investigated the cost of data in the country over two years, presented its final verdict through the Data Services Market Inquiry report, which was scathing of MTN and Vodacom, ordering them to reduce data prices within three months, or face prosecution for exorbitant pricing.

Vodacom reached a multi-year agreement with the CompCom, promising to substantially reduce monthly data bundles by over 30%, and saving consumers R2.7 billion in data costs.

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