Home South African Competition Commission reaches agreement with MTN to cut data costs

Competition Commission reaches agreement with MTN to cut data costs

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MTN will from May 1 reduce the price of 30-day prepaid bundles, with the cost of the 1GB monthly bundle being reduced to R99 from R149

SOUTH Africa’s Competition Commission said on Thursday it had reached a consent agreement with mobile telecommunications firm MTN to reduce data costs.

In a statement, the commission said it had referred the agreement to the Competition Tribunal for confirmation as an order.

Last December the Competition Commission released findings of a probe initiated in 2017 after a sustained public outcry, which confirmed that South Africa’s data prices were too high relative to the rest of the continent.

The report recommended that MTN and rival Vodacom, the two largest mobile network operators in the country, reach agreement with the commission to reduce data prices, particularly for pre-paid monthly bundles, as well as the cost per 1MB (megabyte) for smaller bundles.

Vodacom signed an agreement with the commission last month to cut data costs by more than 30 percent from April 1 and committed to a two-year substantial reduction of monthly data bundles across the board.

On Thursday, the Competition Commission said MTN had already been in negotiations with itself but was also forced to respond in the market to those price changes and the additional subscriber value provided by Vodacom.

“These changes to pricing and free data are now confirmed as irreversible commitments through an order of the Tribunal,” it said.

Under the agreement, MTN will from May 1 reduce the price of 30-day prepaid bundles, with the cost of the 1GB (gigabyte) monthly bundle being reduced to R99 from R149.

It will also offer all its customers zero-rated access to up to 500 public benefit organisation websites and others focusing on education, health care and job recruitment. This will be capped at 500MB per month per customer.

MTN has also agreed to enable all its customers, at no charge, to manage their data usage through its unstructured supplementary service data (USSD) and via its website.

The commission has also reached agreements on data prices with Cell C as well as wireline and wireless telecommunications provider Telkom.

“The confirmation of the agreement with MTN means that all mobile operators have now formally ascribed to the voluntary commitments contained in the recommendations of the data market inquiry for short-term price relief to consumers,” Competition Commission head Tembinkosi Bonakele said.

“This successful conclusion of the first phase of recommendations could not have come at a better time given the greater reliance the public has on data during the crisis,” he added, referring to the Covid-19 pandemic afflicting South Africa and many other countries around the world.

The commission could now turn to focus on the medium-term recommendations around regulatory and legislative change, as well as the development of free public wi-fi and alternative broadband infrastructure, Bonakele said.

– African News Agency (ANA)