The pricing issues in the African telecommunication industry

September 11, 2017 • East Africa, Mobile and Telecoms, North Africa, Opinion, Southern Africa, West Africa

Pricing in the African telecommunication industry

The pricing issues in the African telecommunication industry

Moves to ensure fair competition and to examine pricing in the telecommunications sector have been seen, not only in Europe, but also in key mobile phone jurisdictions on the African continent.

The issue of high data costs has been under the spotlight in South Africa. Most recently, the Minister of Economic Development has asked the Competition Commission to investigate the cause of the perceived high cost of data in South Africa. The Competition Commission has not yet launched any investigation or a market inquiry into this aspect, but is reported to be consulting with the telecommunications regulator, the Independent Communications Authority of South Africa and the regulator charged with enforcing South Africa’s consumer protection legislation, the National Consumer Commission. It is anticipated that an enquiry or investigation will get underway in the near future.

In May 2017, the Competition Authority of Kenya issued a directive requiring telecommunication companies and financial institutions that provide mobile money services to provide real time notifications of the cost of transactions to customers (before transactions are completed). The directive, which apparently responds to consumer complaints, is to be implemented in stages and will affect mobile money services offered through apps, USSD codes and SIM toolkits. The objective of the directive is to provide for consumer protection and fair pricing through a consumer-friendly and transparent system of tariff reporting.

Tariffs for voice calls have been the subject of intervention by the Posts and Telecommunications Regulatory Authority of Zimbabwe launching a cost analysis to assess the degree to which pricing in the telecommunications industry is fair and competitive.

In early July 2017, the Ugandan Communications Commission queried MTN’s recent tariff changes which were made without the regulator’s approval. While not directly a competition-related intervention, the purpose of the UCC’s powers to regulate tariffs is to prevent anti-competitive pricing.

These developments reflect an increasingly active role of telecommunications and competition regulators in regulating fair markets in a sector becoming increasingly significant on the continent.

By Leana Englebrecht, Senior Associate, and Nina Braude, Candidate Attorney, Competition and Antitrust Practice, Baker McKenzie



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