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South African network providers, MTN and Vodacom, to drop data prices

December 3, 2019 • Mobile and Telecoms, Southern Africa, Top Stories

The Competition Commission finally released its latest report – the Data Service Market Inquiry – on Monday, 2 December 2019. The report, which focuses on South Africa’s biggest mobile operators – MTN and Vodacom, concludes that the companies should drop their data prices.

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The Competition Commission states MTN and Vodacom must drop their data prices by as much as 50%.

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

“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.”

“Given their collective market position, adjustments to their prices should impact on market-wide pricing.”

The Commission then went on to say that “access to affordable data is of paramount importance for economic and social inclusion. The full implementation of the package of remedies is also essential to provide the necessary building blocks for South Africa to participate fully in the Fourth Industrial Revolution and take advantage of the opportunities that revolution presents.”

A free data lifeline

Moving beyond just MTN and Vodacom, the report stated that all network operators must provide “a lifeline package of daily free data” to any prepaid package users in South African to “ensure all citizens have data access continually, regardless of income levels”.

“This agreement must then be given formal legislative or regulatory effect within six months. This may include the ICASA End-User and Subscriber Charter Regulations, spectrum licensing conditions or planned amendments to the ECA.”

The Commission claims that it is now up to mobile operators to reach an agreement on how to execute its demands within the three-month deadline.

Edited by Jenna Delport

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