Data Prices Cut Extension Granted for MTN and Vodacom Granted

Photo Credit: PhotoMIX Ltd.

Run-Up

In December last year, the Competition Commission (CC) dropped a bomb on MTN and Vodacom, informing them to drop data prices by almost 50%.

Following a comparison between South Africa and other African countries, MTN and Vodacom came in nearly last at having the cheapest data prices.

Prices were investigated and the CC came to the conclusion that MTN and Vodacom do not have competitive pricing and that a large portion of South Africans are being exploited with high data prices.

Recommendations were made of which an agreement date was set to the beginning of February. Another two deadlines were set for March and June. The most important recommendations were to slice data prices by almost 50% or face legal action and reducing prices of data bundles smaller than 1GB.

Giant’s Objections

MTN said they “respectfully disagree” with the findings and recommendations in the report because its fundamental focus was the manner in which data prices exploit poor South Africans.

Spectrum allocation was blamed by MTN for high data prices. MTN compared South Africa’s spectrum allocation with that of Nigeria and proved why Nigeria’s prices can be more than 3 times cheaper. Until more spectrum can be allocated, MTN will struggle to maintain infrastructure with cheaper data prices.

Extension

The CC made a decision to extend the deadline for Vodacom and MTN to have a decision ready to reduce prices, from February to March, after having separate fruitful discussions with both giants. It also said that discussions have been progressive so far and that engagements with the giants “are at an advanced stage.”

With discussions moving in the right direction, the CC felt that moving the deadline for the giants to reach an agreement is suitable. This arrangement will provide adequate time for the discussion to come to a successful end.

Follow the Story

1. The Competition Commission’s initial findings and recommendations
2. MTN disagreed with the findings and gave their statement on why data prices are so high

Closing

Only one month to go until we know what our data future will look like. Let’s hope the parties involved reach a decision that benefits all.