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South African regulator shelves MTN/Vodacom investigation

South African regulator shelves MTN/Vodacom investigation

A lack of sufficient evidence has led the South African Competition Commission to drop its probe into MTN and Vodacom over anti-competitive pricing strategies.

The regulator stated that it had found no solid grounds for legal action against either of the top two South African operators after a thorough investigation of their pricing plans, which began in 2013 after number three Cell C accused them of stymieing competition.

Cell C’s core complaint was focused around “on net” pricing, through which its larger rivals offered their customers free or discounted calls to subscribers on the same network. The operator decried the practice as inducement and an undue squeeze on its margins.

However, the Competition Commission stated that it had “found that it would be unlikely to succeed in a prosecution of the specific conduct subject to Cell C’s complaint. However, there is evidence to suggest that this conduct and other features of the market, in particular the price differentials applied for on-net and off-net calls as well as long-term subscribers’ contracts, have made it difficult for late entrants such as Cell C to compete effectively.”

The regulator noted that it would now partner with South African communications authority ICASA to look into “regulatory interventions that may be necessary to make the market competitive”.