Competition Commission publishes provisional findings in Data Services Market Inquiry

On 24 April 2019, the Competition Commission of South Africa (the Commission) published a summary of its provisional findings and recommendations in its Data Services Market Inquiry (the Inquiry).

The Inquiry was initiated following persistent concerns expressed by the public about the high level of data prices and the importance of data affordability for South Africa. As such, the purpose of the Inquiry has been to understand what factors or features of the market and value chain may cause high prices for data services, and to make recommendations that would result in lower prices for data services.

The Commission’s findings included the following:

• International benchmarking confirmed that South African data prices are high, particularly for mobile prepaid data.
• The retail pricing structure of mobile data is anti-poor and lacks transparency.
• A lack of spectrum and cost-based facilities access drives up costs.
• Price-based competition in mobile markets can be improved materially.
• The findings in the retail markets also point to potential problems in the wholesale market.
• Addressing the fixed line supply gap will be critical for the provision of alternative data services.

The Commission further made various recommendations addressing the following aspects: (i) immediate relief on data pricing; (ii) the urgent assignment of high demand spectrum and cost-orientated access to facilities; (iii) an intermediate programme to ensure price-based competition; and (iv) the development of alternative infrastructure.

Stakeholders are invited to make further submissions on the Commission’s provisional findings and recommendations. The deadline for submissions is 14 June 2019, and should be emailed to [email protected].

The Commission’s media statement is accessible here.

The summary of provisional findings and recommendations is accessible here.

Please note: The information contained in this note is for general guidance on matters of interest, and does not constitute legal advice. For any enquiries, please contact us at [email protected].