Cell C lodges anti-competitive complaint against Vodacom, MTN

Cellphone operator Cell C lodged a complaint on Tuesday with the Competition Commission against MTN and Vodacom for anti-competitive conduct.

The crux of the complaint, according to a Cell C statement, is that MTN and Vodacom discriminate with regard to pricing when it comes to calls within a network and calls to other networks, which it says "has a dramatic and direct impact on smaller operators' ability to acquire new customers".

"The two dominant incumbents discount their effective on-net prices [within a network] substantially, while charging a premium for their customers to call off-net [to other networks]. This amounts to discriminatory pricing and is without doubt anti-competitive when adopted by dominant operators," said Cell C chief executive Alan Knott-Craig.

"Customers that call off-net are being penalised often without them realising it. With number portability, customers don't always know if they are calling on-or off-net anymore, so they don't actually know what rate they are paying." 

The cellphone company said that in many mobile markets around the world, regulators are opposed to differential on-net and off-net pricing, and in some instances, dominant mobile network operators are facing stiff fines for this kind of discriminatory pricing, which locks in customers and prevents switching.

It pointed to a €183.1-million fine imposed by the French Competition Authorities at the end of 2012 on Orange France and SFR, a French telecommunications company, for anti-competitive practices in the mobile telephony sector, specifically for discriminatory on-net pricing.

Cell C has also cited in its complaint that the Nigerian regulator in 2013 called on MTN Nigeria, an MTN company, to introduce flat rates so on-net tariffs were the same as off-net tariffs. 

New call termination rates have been introduced by the Independent Communications Authority of South Africa (Icasa), which will see the rate drop from 40c presently to 10c by 2016.

Icasa said the decision was driven by a need to drive greater competition in the sector and to reduce dominance by the top two players MTN and Vodacom. 

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