Competition Commission to release provisional data inquiry report, extends conclusion to year-end

1st April 2019

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

     

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The Competition Commission is preparing to release a provisional report on its data inquiry by the end of April, with the intention of finalising its investigation and releasing the final outcomes by December 31, months later than the initial planned March conclusion.

The commission on Monday said it plans to undertake further analysis of extensive evidence gathered by the inquiry, invite submissions on the provisional report and engage in further consultations with key stakeholders, before completing its assessment.

“Having regard to the comments, submissions and information gathered by the inquiry to date, the commission has decided to further amend the completion date,” the commission said in a statement.

The scope of the inquiry, which aims to understand the general state of competition in data services and review the cause of high data prices, remains unchanged.

In August 2017, the commission embarked on the market inquiry into high data costs to examine any features that prevented, distorted or restricted competition.

It subsequently held public hearings in October 2018 – with the aim of publishing a final recommendation report by March this year – where the commission, as part of its evidence gathering phase, hosted nearly 20 market participants, companies, government representatives and associations.

Early indications emerging from the presentations are that poor South Africans are left on the periphery of the economy as they face price discrimination for buying airtime and data in the small quantities that they can afford at a time, and are disproportionately situated in rural areas that receive poor network quality.

The inquiry was launched followed widespread calls by consumers for lower data costs and subsequent queries from at least three Ministers over high data costs and data affordability.

During the public hearings, the commission’s chief economist Dr Liberty Mncube had said that the inquiry has four broad questions it is seeking answers to.

This included whether South Africa’s data prices are very high and, to the extent that data prices are higher than they ought to be, surrounding factors are driving this.

Further, the commission seeks to determine how those factors can be effectively remedied and what the impact of high data prices and access issues are on low-income consumers.

The inquiry aims to cover all relevant players in the value chain that contribute to or influence the price of data services and obtain a deeper understanding of the data services value chain.

It will also assess the state of competition in the market at every stage of the value chain for the provision of data services to identify areas of market power where consumers may be exploited or excluded, or where structural, behavioural or regulatory factors influence competition or pricing.

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 regulations 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 it relates 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.

Edited by Creamer Media Reporter

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