___[27 April 2019] ICASA has published a media release welcoming the provisional findings and recommendations by the Competition Commission following the data services market inquiry:
___[24 April 2019] The Competition Commission has released a provisional report on its inquiry into the data services market.
Interested parties have until 14 June 2019 to make submissions on the provisional findings and recommendations, which include the following:
- the Commission undertook its own exercise of benchmarking local mobile data prices internationally and concluded that local prices – particularly in the prepaid market – are relatively high.
- pricing structures are “anti-poor” and lack transparency
- a lack of spectrum and cost-based facilities access is driving up costs
- price-based competition in mobile markets can be improved materially,
___[29 March 2019] The Competition Commission has announced a further extension to the finalisation of this Inquiry, with the final report now due by 31 December 2019 and an interim report to be delivered by 30 April 2019. The Commission will invite public submissions on the interim report.
__[26 March 2019] See below for transcripts of the public hearings in respect of the Competition Commission’s Data Services Market Inquiry, held in October 2018:
___[19 October 2018] Please see below for presentations made at the public hearings:
Alliance for Affordable Internet
DG Murray Trust
Media Monitoring Africa
Internet Service Providers Association
Research ICT Africa
Telkom / BRG
___[5 October 2018] The Commission has issued a media release relating to concentration of market power in the South African Product Markets, referring to a working paper on this topic released earlier this year. The results of the Commission’s investigation – based on an analysis of merger reports since 2009 – are fascinating for the “information communication technologies” product market, which is identified as being the most concentrated product market by a substantial margin.
__[15 September 2018] The Commission will hold public hearings on the Inquiry from 17-19 October 2018 at its offices in Pretoria.
Those wishing to participate must:
- confirm this to firstname.lastname@example.org by no later than 21 September 2018,
- send a written submission to the same address by no later than 11 October 2018.
Submissions should focus on the following:
- Are data prices in South Africa (whether mobile, fixed or other) higher than they ought to be?
- To the extent that data prices in South Africa are higher than they ought to be, what are the factors that drive these outcomes?
- How can these factors be effectively remedied?
- What is the impact of data prices and access to data more broadly on lower-income customers, rural customers, small businesses and the unemployed? How important are affordable data prices for these customers?
Previous submissions (November 2017) to the Commission can be found below:
- Alliance for Affordable Internet
- Amandla Mobi
- Broadband Infraco
- Cell C
- The DG Murray Trust
- Kuziva Muzondo
- Media Monitoring Africa
- Telkom (Berkely Research Group)
- Vodacom / Vodacom Letter
__[3 September 2018] The Commission has published a notice to the effect it requires until 31 March 2019 to complete its analysis of evidence gathered and further consultations with stakeholders. It also indicated that it is now planning to hold public hearings, which is interesting.
___[23 September 2017] The Competition Commission has issued a call for submissions from the public to assist it with its inquiry into data prices in South Africa. The objective of the market inquiry is to determine what factors or features of the market(s) and the value chain may cause or lead to high prices for data services, and to make recommendations that would result in lower prices for data services.
The closing date for submissions is 1 November 2017. These should be emailed to email@example.com.
Submissions must be accompanied by a signed DSI-1 Form – “Registration Form for Written Submission” – and should follow the requirements set out in the Data Services Market Inquiry Guidelines and the Terms of Reference for the Inquiry.
The Commission has provided a list of questions to be responded to, but stressed that interested parties can make submissions on any matter relevant to the cost to communicate in South Africa, whether from a consumer, business or government perspective.
Submissions should be as detailed as possible and any views or opinions expressed should be substantiated, as far as possible, by examples and evidence or studies conducted by the stakeholders.
Data prices and services in South Africa
- Current market research suggests that data prices in South Africa are significantly higher than many other countries, both in Africa and internationally. In light of the recent research, the following questions pertain to prices for data services in South Africa:
- In your view, how do data prices in South Africa compare to other countries?
- For which specific data markets, products or services (whether for data services alone or a product that includes additional services) are prices high in South Africa? Please substantiate your response.
- In your view, what are the main causes for the higher prices for data services in South Africa? In your answer you could refer to probable causes such as cost issues, competition issues or regulatory issues. Please elaborate and provide any available evidence.
- With regards to data services and related products used in South Africa, please list all services that you currently use as an end-consumer and/or as a business or other such entity. Please provide details on the following:
- The exact products/services used;
- Whether you use these as a private consumer or business/organisation (or both where appropriate);
- The name of the service provider/s; and
- The pricing and contractual arrangements involved.
The data services value chain
- Describe the entire value chain for the provision of data services. Include the following in your description:
- The different levels of the value chain and the activities thereof;
- A list of all stakeholders active in each of the levels of the value chain (to the best of your knowledge);
- The nature of commercial relationships between the different levels of the value chain; and How each level of the value chain identified above is linked to other parts of the Information and Communication Technology sector, and the economy more broadly.
The state of competition in the provision of data services
- How do existing firms conduct themselves in the markets for the provision of data services, whether with respect to other firms (competitors or potential entrants) or with respect to their customers?
- Are there firms that operate as monopolies at any level of the value chain for the provision of data services? Are there firms which have market power in any data market, service or product? Elaborate and provide examples.
- Across the value chain for data services, are there any firms that engage in any conduct that could be seen as unfair or anti-competitive? Please elaborate and provide examples.
Telecommunications regulation and spectrum allocation
- There are a variety of regulations, legislation, and regulatory bodies – including the Independent Communications Authority of South Africa (“ICASA”), the Department Of Telecommunications and Postal Services (“DTPS”), and the Department of Communications (“DOC”) – that inform the functioning of the telecommunications sector in South Africa. In light of this, please answer the following questions:
- How does the current regulatory environment in the telecommunications sector impact (i) the ability of existing firms to charge high prices for data, (ii) the level of competition, and (iii) the potential for entry?
- Provide your understanding and view of the roles of ICASA, DTPS, DOC and any other relevant body in the sector with respect to prices for data services in South Africa.
- Provide your view of any recent regulatory changes and proposed amendments to the Electronic Communications Act – such as those focusing on rapid rollout of infrastructure and sharing of network infrastructure – to the extent that they relate to prices for data services and products.
- As the demand for data in South Africa escalates, the allocation of, and access to, spectrum in South Africa has become a key issue in the sector and for data services in particular. With regards to spectrum, please answer the following questions:
- How do issues of spectrum access and allocation affect competition and the potential for new entry?
- How do you view the role of spectrum in the mobile market and how do you think spectrum affects costs and pricing of data services?
Adequacy of data supply quality and coverage
- Please address the following questions:
- In your view, is data supply quality and coverage in South Africa adequate by international standards and the country’s development needs? Please elaborate.
- How are businesses and consumers in low-income, under-developed, or rural areas affected by South Africa’s data services challenges?
Kindly provide submissions on any other issues not referred to in the Terms of Reference that you view as relevant to the price of data services in South Africa. Please detail these issues and provide verifiable evidence in support of your submission.
__[18 August 2017] The Competition Commission has given notice of its intention to initiate an inquiry into the data services market through the publication in the Government Gazette of the terms of reference of the inquiry.
The Data Service Market Inquiry – which will commence on 18 September 2017 – comes after a request from the Minister of Economic Development, acting in response to concerns relating to high data costs in South Africa and recognising the importance of data affordability for the South African economy and consumers.
The Commission further “has reason to believe that there are features of the sector that prevent, distort or restrict competition within the sector, and/or to achieve the purposes of the Act”.
The Terms of Reference spell out the purpose, objectives, scope of the inquiry.
The purpose of the inquiry is to understand what factors or features of the market(s) and value chain may cause or lead to high prices for data services, and to make recommendations that would result in lower prices for data services.
The main objectives of the inquiry are to:
- Obtain a clear understanding of the data services value chain, including the interaction and commercial relationships between different levels of the value chain, and the relationship with other parts of the ICT sector and the broader economy.
- Assess the state of competition in the market at every stage of the value chain for provision of data services in order to identify areas of market power where customers or consumers may be exploited or excluded by firms and to identify any other structural, behavioural or regulatory factors that may influence competition or pricing. The assessment would include but not be limited to:
- Market structure;
- The general adequacy and impact of the current regulatory regime;
- Strategic behaviour by large fixed and mobile incumbents;
- Costs faced and profits earned by fixed and mobile network operators;
- Current arrangements for sharing of network infrastructure;
- Investment in infrastructure by operators and access to, and allocation of, spectrum as they relate to data services price and competition concerns; and
- The adequacy of regulation to promote new South African entrants (particularly historically disadvantaged individuals), including but not limited to matters such as dynamic spectrum access and local loop unbundling.
- Benchmark South African data services pricing against those of other countries.
- Establish whether data supply quality and coverage is adequate by international standards and the country’s developmental needs.
The outcome of the market inquiry will be report including a set of recommendations:
- to government on how the market could be made more competitive and inclusive and how data prices can be brought down to secure South Africa’s position as a low-data-cost economy.
- to the sector regulator on the competitive impact of the regulatory framework, and any need for amendments thereto.
The Competition Commission believes the inquiry is likely to be completed by 31 August 2018.