South Africa: Competition Watchdog Blasts Vodacom and MTN for 'Excessive Pricing' of Mobile Data

analysis

A Competition Commission official told Business Maverick that the watchdog is expecting legal action from Vodacom and MTN on its findings. 'We are prepared to fight them and defend our findings vigorously,' the official said.

It's perhaps justified that customers of SA's largest telecommunications company, Vodacom, have seen red - like its brand colour - over their sky-high mobile data costs in recent years.

Vodacom's pricing model of mobile data for its 43 million customers in SA has received a drubbing from the Competition Commission, confirming what many people have always suspected.

In its final data services market inquiry report released on Monday 2 December 2019, the competition watchdog found that Vodacom's profits are not a function of its agility or innovation in the telecommunications industry but "excessive pricing" on mobile data products, mainly prepaid.

According to the commission, Vodacom has "substantial market power" that allows it to charge customers high mark-ups on mobile data prices of between 20% and 25% on average over the past six-years - well above inflation in each year.

"This level of mark-ups is sufficiently high to establish a prima facie case of excessive pricing by Vodacom," the commission said in its final report, adding...

See What Everyone is Watching

More From: Daily Maverick

Don't Miss

AllAfrica publishes around 700 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.