Vodacom, MTN off the hook

The Competition Commission has decided not to prosecute Vodacom and MTN for anti-competitive conduct due to insufficient evidence.

This is despite a lengthy investigation following a complaint from Cell C which revealed that there were several features in the cellphone market which affected the ability of smaller operators to compete.

Cell C had alleged Vodacom and MTN engaged in pricing strategies that made it cheaper to make on-net calls (calls between users of the same network) as compared to off-net calls (calls between different networks).

In particular‚ Cell C complained that the price differentials applied by Vodacom and MTN prevented competition and further accused the two companies of excessive pricing‚ inducement and margin squeeze.

“The commission found that it would be unlikely to succeed in a prosecution of the specific conduct.

“However‚ there is evidence to suggest this conduct and other features of the market‚ in particular the price differentials applied for on-net and off-net calls as well as long-term subscribers’ contracts, have made it difficult for late entrants such as Cell C to compete effectively‚” the commission said yesterday.

There was therefore a need to look broadly into the state of competition in the cellphone market in South Africa‚ specifically at the retail level‚ as the market was still dominated by two players‚ years after the licensing of Cell C and Telkom Mobile‚ the commission said.

“In this regard‚ the commission will engage the Independent Communications Authority of South Africa (Icasa) to explore regulatory interventions that may be necessary‚” it said.

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