MTN engages Comp Commission, Eliovect cries foul

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Jacqui O'Sullivan, executive for corporate affairs at MTN.
Jacqui O'Sullivan, executive for corporate affairs at MTN.

MTN says it is actively engaging with the Competition Commission regarding a complaint launched by empowerment consortium Eliovect.

The consortium alleges unfairness meted out on small businesses in the prepaid airtime market by the operator as well as Cell C, in favour of the latter’s majority shareholder, Blue Label Telecoms.

The Pan-African mobile operator and Cell C are being investigated by the Competition Commission for allegedly hindering fair competition in the prepaid airtime space by giving Blue Label favourable terms that do not apply to black service providers. The complaint says black service providers cannot buy directly from mobile network operators.

Jacqui O'Sullivan, executive for corporate affairs at MTN, tells ITWeb: “As this is an ongoing investigation, we prefer not to comment on the content of the investigation, or to speculate on any potential outcome, as we believe it best to allow the process to run its course. We will continue to assist the commission in any way it might require.”

O’Sullivan could not be drawn to discuss specific allegations levelled against MTN by Eliovect.

Cell C hadn’t responded to a request for comment by the time of publication.

The allegations being probed against MTN and Cell C includes that 10 companies that are competition to Blue Label have a minority market share because of Blue Label’s dominance.

The 10 companies listed at the commission are PAV Bulk Airtime Distributor, Freepaid, ERZ Telecoms, Five Rand, Thetha Thetha, Del Cell, Glocell, Smartcall, Crown Service Provider Company and Ubuntu Telecoms.

Sello Phakoe, chairman of the black economic empowerment consortium, says: “I have been advised that these competitors hold a small fraction of the market share and do not receive the same terms as Blue Label.”

Phakoe also alleged in his documents that after lodging the complaint with the Competition Commission, MTN decided to no longer negotiate a contract that had initially been agreed upon by both parties.

In a letter dated 24 May 2018 from MTN to Eliovect seen by ITWeb, MTN SA chief financial officer Sandile Ntsele writes: “Please note that MTN has not ‘resolved to disengage’ with Eliovect. Rather, given that you are the sole complainant in the matter with the Competition Commission enquiry, it is simply improper for MTN to engage yourself in respect of the issue at hand, until such time as the Competition Commission enquiry has been finalised.”

The letter reads further: “For clarity, I re-iterate MTN’s position, namely, that as there is an ongoing legal process, it is only proper that all business discussions be held in abeyance, until such time as the Competition Commission enquiry is resolved and dispensed with in finality.”

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