MTN not happy with Competition Commission report on data

Africa’s largest mobile operator, MTN, has slammed the Competition Commission’s findings into data prices, saying that its investigation was flawed.

In its inquiry into data prices, the Competition Commission found that the two largest operators, Vodacom and MTN, were practicing unfair price discrimination with their data bundles, which disadvantaged poor South Africans the most.

The commission ordered Vodacom and MTN to reduce mobile connectivity prices by up to 50% in the next two months or risk being prosecuted.

MTN Group CEO Rob Shuter told investors on Thursday: “We are disappointed with the way the report has been issued and how it has been framed.

“Mobile is one of the few areas where we have world-class national service accessible for all South Africans, and we believe it is regrettable and unnecessary that the report has painted the industry in such a negative light.

“We do not believe the report sufficiently acknowledges the progress made to date on data price transformation. We have many issues on the bench-marking data.

“We also believe it is not accurate to bucket MTN and Vodacom together when in fact MTN is a much smaller operator, generating roughly 50% less revenue, lower returns and actively competing against a very strong number one operator, as well as very active and challenging number three and number four operators.”

MTN is the second-largest operator in SA with 29-million subscribers. Vodacom has 43-million.

MTN Group CFO Ralph Mupita said the report focused on low-value data bundles, specifically the 500MB offerings and below.

“At the half-year, all the service revenue from prepaid data bundles of 500MB and lower was approximately R2bn. That amounts to 10% of the total service revenue we recorded at half-year,” Mupita said.

Despite reservations about the report, MTN acknowledged that the price of data needs to come down, stating that new spectrum needs to be issued by the Independent Communications Authority of SA (Icasa). 

“In the event that we do have a fundamental difference of opinion, the legal route available to us would be to defend the position in front of the Competition Tribunal if it is referred by the Competition Commission,” said Shuter.

gavazam@businesslive.co.za