Commission outlines Cell C complaint
Cell C has alleged that MTN and Vodacom have contravened a number of sections of South Africa's Competition Act.
The Competition Commission has acknowledged receipt of a complaint laid by mobile operator Cell C against MTN and Vodacom in which it alleges that its two bigger rivals are engaging in anticompetitive behaviour.
Cell C lodged the complaint with the commission on Tuesday.
The commission says that, according to Cell C’s complaint, both Vodacom’s and MTN’s pricing models contravene several sections of the Competition Act. These are that the two operators charge excessive prices to the detriment of consumers and engage in exclusionary acts, including acts that require or induce a supplier or customer to not deal with a competitor.
“The Commission is currently studying Cell C’s submission and cannot comment on the merits at the moment,” a spokesman tells TechCentral.
Cell C says the basis of its complaint is the way in which MTN and Vodacom “discriminate between their on-net and off-net effective prices, which has a dramatic and direct impact on smaller operators’ ability to acquire new customers”.
“The two dominant incumbents discount their effective on-net prices substantially while charging a premium for their customers to call off-net. This amounts to discriminatory pricing and is without doubt anticompetitive when adopted by dominant operators,” says Cell C CEO 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.”
But Vodacom spokesman Richard Boorman describes it as “standard practice worldwide for companies to offer their customers lower priced calls when those calls are to other people on the same network”.
“Cell C is apparently arguing for an increase in the price that Vodacom customers pay to call other Vodacom customers. It’s hard to argue that increasing prices would be a benefit to consumers.”
Meanwhile, MTN South Africa CEO Zunaid Bulbulia says that the arguments raised by Cell C are “novel”.
“We deny that there is any anticompetitive conduct as alleged,” says Bulbulia. “In fact, MTN is providing good value to its customers within the context of a vigorously competitive market.”
He says MTN regards Cell C’s move as “another desperate attempt to cry for further subsidies for a failing business”.
“We believe that it is a spurious complaint and we will of course co-operate with the authorities should it be deemed necessary to argue this matter.”
Bulbulia says that he finds it odd that Cell C complains about its competitors’ on-net call propositions when it has one of its own. — (c) 2013 NewsCentral Media
- See also: Vodacom, MTN face antitrust complaint