MTN says CompCom used old stats in data inquiry report

MTN has accused the Competition Commission of using outdated information in preparing its report on the data services market in South Africa.

It said on Thursday that the commission’s studies “appear to have largely relied on data from 2017, which (does) not consider changes in 2018 and this year”.

“Much has changed in the mobile data pricing sector in the past 18 months… In 2017, MTN’s effective rates reduced by 30%, in 2018 by a further 28%, and year-to-date reductions for 2019 are at 18%,” it said in an e-mailed statement.

“Cumulatively, the average cost of data on MTN South Africa’s network has more than halved in the past three years,” it added.

MTN South Africa CEO Godfrey Motsa blamed the lack of access to new radio frequency spectrum for having a negative impact on the sector. “The spectrum crunch that has beset South Africa for a decade has undoubtedly hindered the health and growth of the industry,” he said.

“Out of the 21 countries across Africa and the Middle East in which MTN operates mobile networks, only our operations in Afghanistan, South Sudan and Yemen have less spectrum than in South Africa,” Motsa added.

R77-billion

MTN has spent R77-billion on its network in South Africa in the past decade, a figure far higher than would have been necessary if it had been given access to more spectrum earlier. MTN, he said, had to “build itself out of the spectrum shortage”.

“In the absence of spectrum, more infrastructure is required to boost coverage with what little spectrum is available, all of which comes at huge cost.”

The operator warned that international benchmarking on pricing requires more than a simple price comparison to determine the state of competition in a market. The Competition Commission this week pointed out that other markets in Africa in which Vodacom and MTN operate have lower data charges than in South Africa.

“The primary requirement of an international benchmarking study is the selection of the relevant peer group countries to ensure the study adequately accounts for comparable factors. These include, among others, demand, population, demographics and geography,” MTN said.

“Geography is a simple example of such a comparable factor, in that it costs considerably less to build a mobile network in a small country with a relatively concentrated population, where the topography is largely flat. For this reason, it is necessary to compare countries on several comparative criteria to achieve truly comparative sets of information. These elements appear not to be adequately considered in (the commission’s) preliminary report.

“Mobile network operators around the world, including in South Africa, also compete intensively on non-price factors such as network quality and coverage.”

The company said the telecoms sector is complex. “Buying data is not like buying electricity or fuel. Important micro segments exist that should allow customers to buy for their own usage patterns and needs, and there is significant risk in proposals to create some sort of standardised pricing for this sector,” it said.  – © 2019 NewsCentral Media