MTN's head office in Johannesburg. Picture: EPA/KIM LUDBROOK
MTN's head office in Johannesburg. Picture: EPA/KIM LUDBROOK

The Independent Communications Authority of SA (Icasa) has fined MTN R5m for its decision to triple the price of its WhatsApp data bundles.

In 2018 the country’s second largest mobile network operator by subscriber numbers introduced a monthly WhatsApp bundle of 1GB for R10 in April.

This move resulted in WhatsApp usage on the network increasing by 300% in eight weeks, Jacqui O’Sullivan, executive for corporate affairs at MTN SA, said.

Icasa’s complaints and compliance committee (CCC) said MTN had knowingly contravened regulations and brought problems for itself.

The finding of the CCC is that MTN was in grave error by introducing the R10 deal,” the regulator said.

The R10 monthly bundle resulted in increased traffic from customers, forcing MTN to invest R200m to expand capacity on its network. MTN later advised Icasa that it intended to raise the price to reduce demand and pressure on its 3G network.

“An unintended consequence of the low-priced WhatsApp data has been an extraordinary increase in demand on MTN’s 3G network,” said O’Sullivan. 

On 18 June 2018, MTN advised Icasa that it intended to raise the price from R10 to R20 but chose to delay the change, hoping it could improve its network to cope with the increased traffic.

This did not work out as planned and on July 12  the operator notified Icasa that an even higher price increase was needed to reduce demand and pressure on the 3G  network. 

MTN SA CEO Godfrey Motsa followed this up with a letter to Icasa requesting leniency and arguing that the operator could not wait the normal seven days from notification to implement the price change.

MTN ultimately changed the price on July 16 after it did not receive a response to the letter, O’Sullivan said.

The operator has said it will appeal the regulator's decision in the high court.

gavazam@businesslive.co.za