CompCom’s data report creates complexity: MTN

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Rob Shuter, president and CEO of MTN Group.
Rob Shuter, president and CEO of MTN Group.

Rob Shuter, president and CEO of MTN Group, has criticised the Competition Commission (CompCom) report on data pricing in SA, saying it creates complexity for the telecoms industry.

Shuter made the comments while speaking to investors yesterday.

He said the recommendations of the two-year inquiry into data pricing are non-binding because, in terms of competition law, it’s not an investigation but a market review.

With his comments, Shuter becomes the latest leading CEO to disagree with CompCom over its stance on the cost of data.

Last week, Telkom CEO Sipho Maseko and Johan van Zyl, CEO of African Rainbow Capital, which is a 20% shareholder in mobile data-only network, Rain, called the competition watchdog’s decision “blunt and archaic”.

Now, Shuter said the South African telecoms industry has thrived on competition.

“We believe that across all the categories, and while we do acknowledge that there is work to be done in prepaid pricing, we don’t agree with the conclusion that this is because of a lack of competition.

“We find it odd that someone would conclude that a market is essentially competitive for voice, enterprise and post-paid data, and not for prepaid data,” he said.

After two years of investigating the cost of data in the country, the CompCom concluded that, notwithstanding the most recent price reductions, Vodacom and MTN must independently reach an agreement with it on substantial and immediate reductions on tariff levels, “especially prepaid monthly bundles, within two months of the release of the report.

“The preliminary evidence suggests that there is scope for price reductions in the region of 30% to 50%.”

Furthermore, it said Vodacom and MTN must independently reach agreement with the commission within two months on a reduction in the headline prices of all sub-500MB 30-day prepaid data bundles to reflect the same cost per MB as the 500MB 30-day bundle, “or cost-based differences where such cost differences have been quantified, as well as the cessation of partitioning strategies that contribute to anti-poor pricing and/or inferior service outcomes”.

Shuter noted another complexity of the report “is that it was issued shortly after a report from ICASA, the sector regulator, entitled: ‘Discussion document on the market inquiry into mobile broadband services in South Africa’, with a very different approach in the two reports, with some conflicting recommendations.

“So that certainly is creating some complexity for us and we have asked the various public sector bodies to try and seek some internal alignment as well.”

Two weeks ago, ICASA published a Mobile Broadband Services Inquiry discussion document to solicit written comments from different sectors of society, to be submitted within 45 working days from date of publication.

The discussion document, which is informed by information and data received from licensees, sets out the authority’s preliminary views on the definition of relevant mobile broadband services markets and the effectiveness of competition within these relevant markets.

The discussion document further identifies licensees that may have significant market power in the identified markets, and proposes pro-competitive remedies.

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