MTN opposes cutting data prices
The mobile operator disagrees with Competition Commission recommendation that prices be cut by up to 50%
MTN says it will oppose “overbroad and intrusive recommendations” from SA’s antitrust watchdog, saying it already slashed data prices and invested heavily in its network.
On Monday, the Competition Commission warned that MTN and its rival Vodacom could face prosecution if they do not reduce data prices.
MTN said it disagrees with recommendations made in the summary report that argues data prices should fall by as much as half, with the mobile network operator still needing to study the yet-to-be released final report.
“We reiterate comments made earlier in the year that MTN SA has substantially reduced the effective price of data in SA, having also invested heavily in the network to accommodate growing data demand with limited spectrum availability,” the company said.
MTN said it would continue to invest heavily in its network, though SA had among the lowest spectrum allocations in all the markets in which it operates. Spectrum refers to a radio frequency that allows mobile phone operators to send voice and data over the airwaves — which mobile operators have long argued is vital for bringing down the cost of internet connectivity.
The commission’s final report says MTN and Vodacom have to independently reach an agreement with the regulator on substantially reducing prices within two months of the release of the report. The commission said there is scope for price reductions of 30%-50%.
“The strategy in SA for the two dominant operators has been to maintain the high pricing levels of 30-day, prepaid data bundles, despite headline price reductions by challenger networks,” the commission said.
The ultimatum is likely to be seen as a victory for consumers, whose social media and street campaigns against expensive data gained traction in 2017 when the Competition Commission set up an inquiry into the sector.
The networks are not the only ones grappling with the report. Communications and digital technologies minister Stella Ndabeni-Abrahams said the government, which received the report on Monday, would read through the findings and recommendations to find ways to craft new policies to help ordinary South Africans have more affordable internet access.
MTN’s share price was up 1.67% to R87.44 in afternoon trade on Wednesday, having fallen 5.34% so far this week.