South African Operators Investigated for Collusion

­South Africa's Competition Commission has confirmed it is again investigating the country's mobile operators for collusion, although it had cleared them of the accusation only a month ago. The company has subpoenaed documents from the companies and is now studying them.

At a hearing last month held by the Parliamentary Portfolio Committee, Competition Commission commissioner Shan Ramburuth said there was no evidence of collusion between the operators, referring to interconnection fees which are a regulated issue, but last week retracted this and said that investigations were now being carried out.

Commissioner Shaun Ramburuth would not say how many people had been subpoenaed, saying only that the "process of interviewing them is under way".

Keith Weeks, head of the commission's Enforcements and Exemptions Division, told ITWeb that the authority may call the cellular operators in to explain themselves on charges of collusion. However, Weeks says the two investigations are separate, and the new investigation is looking at other agreements that the mobile operators may have in place.

"The interconnection agreement was not collusive, although it may have anti-competitive consequences."

The Commission has come under criticism over its handling of the investigation after it was revealed that initial complaints were originally filed in 2004. The Commission said that it had been hampered by conflicts of jurisdiction with the telecoms regulator, ICASA.

In a statement, Vodacom said that it "is not involved in any anticompetitive behaviour, and can confirm that it has not received any communication from the Competition Commission." For it's part, MTN agreed that it also had not been contacted by the Competition Commission, although it did confirm that previous investigations had taken place.

"The Competition Commission has investigated three complaints against mobile operators, including MTN, relating to interconnection. MTN denies there is any merit in these complaints, and the Competition Commission has not instituted any action against MTN pursuant to the complaints."

The smallest operator, Cell C also confirmed that it has not been contacted by the Competition Commission and denied the allegations of collusion.

The country has two dominant operators, and a distant third. Based on figures from the Mobile World analysts, their respective market shares are: Vodacom (52.2%), MTN (34.4%) and Cell C (13.5%).

In related news, the two dominant operators have agreed to a proposal from the telecoms regulator to lower their interconnection fees. Under the plans, there will be an approximately 19% immediate reduction of the blended wholesale interconnect tariffs, with further reductions year-on-year for the following three years.

On the web: ITWeb - Mobile World

Posted to the site on 25th October 2009