MTN faces legal action for 'delaying' data prices cut

MTN could face a legal challenge after failing to come to an agreement with the Competition Commission.
MTN could face a legal challenge after failing to come to an agreement with the Competition Commission.
Image: Siphiwe Sibeko/REUTERS

The Competition Commission may be forced to take legal action against MTN after months of negotiations on data price reductions that have not yielded any results.

As much as MTN has announced price reductions on a number of their products, the commission is adamant that they have not reached an agreement with the second largest mobile network operator in South Africa.

The commission’s Data Services Market Inquiry in December found, among others, that MTN and Vodacom had a duopoly on the industry, that mobile network operators were charging customers exorbitantly for data and ordered them to reduce their prices by up to 50%, failing which they would face prosecution.

So far MTN remains the only mobile network operator that has not reached an agreement with the Competition Commission after Vodacom, Telkom and Cell C have all agreed to reduce their prices and committed to a social impact agreement with the commission, which includes making available free some of their products such as access to educational websites.

The commission said that it was aware that it may be forced to take legal action against MTN should the failure to come to an agreement prolong any further even after an extension of a month which expired end of March.

“We just haven’t reached an agreement with them to our satisfaction with regards to the concerns raised in the findings and recommendations. We need a social compact with MTN with undertaking that will address all our concerns,” Competition Commission spokesperson Sipho Ngwema said.

“We have yet to reach an agreement with MTN that would address our concerns with regards to data prices although there were claims in the media with regards to such. We hope this will still happen or we may be forced to take action against them.”

MTN said that it was still at the negotiating table and that an agreement would be reached in the next coming days.MTN announced last month that among others it would be slashing the price of its 30-day 1 gig internet bundle by 34% from R149 to R99.

The commission said, at the time, it was surprised by MTN’s decision to announce that it was slashing its data bundles prices while they were still in talks.“We are pleased to announce details of the pricing reductions as committed to last month and we continue to engage with the Commission to also finalise an agreement in the coming days,” MTN CEO Godfrey Motsa said today.

MTN was unhappy with the commission’s report on data prices when it was released in December saying that its investigation was flawed.The report had also found that MTN and Vodacom were practising unfair price discrimination with their data bundles.

MTN said it was unhappy that the report had placed them and Vodacom in the same bucket when it was actually making 50% less in revenue.MTN is the second-largest operator in SA with 29-million subscribers. Vodacom has 43-million. 

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