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Competition Commission sets sights on high data costs

18th August 2017

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

     

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The Competition Commission has initiated a market inquiry into data services following widespread calls by consumers for lower data costs and subsequent queries from at least three Ministers over high data costs and data affordability.

With the gazetting of the terms of reference (ToR) of the inquiry, on Friday, the commission plans to call for submissions after 20 business days in an effort to determine what may cause or lead to high data prices, along with the state of competition.

Requested by Economic Development Minister Ebrahim Patel, the inquiry is expected to start on September 18 and is likely to be completed by August 31, 2018, with recommendations to be made to lower data service prices.

“The commission has initiated the inquiry because it believes there are features in this market that prevent, distort or restrict competition within the sector,” it said in a statement on Friday.

The inquiry will cover all relevant players in the value chain that contribute to or influence the price of data services.

As part of the assessments, the commission will delve into the market structure; the general adequacy and impact of the current regulatory regime; and the adequacy of regulation to promote new South African entrants.

Further, strategic behaviour by large fixed and mobile incumbents will be reviewed, along with the network infrastructure-sharing trends among industry and the fixed and mobile network operators’ costs and profits.

Lastly, the commission will unpack the investment in infrastructure undertaken by operators and the access to and allocation of spectrum as they relate to data services pricing and competition concerns.

Ultimately, the final outcome of the review will be for the commission to obtain a clear understanding of the data services value chain; benchmark South Africa’s data services pricing internationally; and establish whether data supply quality and coverage is adequate by international standards and in line with the country’s developmental needs.

Further, the commission aimed to unpack the state of competition in the market at every stage of the data services value chain in an effort to identify areas of market power where customers or consumers “may be exploited or excluded by firms” and to identify any other structural, behavioural or regulatory factors that may influence competition or pricing.

Edited by Creamer Media Reporter

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