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Cellphone operators have been notified

Watchdog probes cellular phone firms for price collusion  Comments

Cellular phone firms have colluded on rates they charge

October 15, 2009


South Africa's cellphone firms are facing another battle with regulators after the country's competition commission said on Thursday it would investigate possible collusion over prices in the industry.

"We've got three cases that we are investigating (in the cellphone industry), but they deal with the same issue," Nandi Mokoena, Competition Commissions' manager of strategy and stakeholder relations, told Reuters on Thursday in a telephone interview.

"The allegations are that cellular phone companies have agreed on the rates they charge."

Mokoena said cellphone operators - MTN, Vodacom and Cell C -- have been notified about the probe.

Meanwhile, the South African government on Tuesday and Wednesday held public hearings, as part of plans to push mobile and telecom operators to reduce interconnection fees, in an attempt to lower telecoms costs that have impacted the country's growth.


On Tuesday, the government ordered a cut in cellphone charges by the end of November, saying it had been forced to act because the communications regulator would not do so.

Siphiwe Nyanda, Minister of Communications, directed the regulator to lower interconnection rates, a charge to transfer calls to rival networks. It gave no details.

The committee has proposed interconnection rates should be cut to 60 cents per minute during peak times by November and then by a further 15 cents annually until 2012. Operators currently charge each other 1.25 rand per minute during peak times. - Reuters
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Showing page 1 of 2 comment pages, 18 total comments
16 Weeks ago Alun wrote :
In response to Tashy's comment. Fair enough..... it will affect many people's jobs etc....as you say. However there has been a far greater cost that this country has paid over the last years and an even greater risk of it continuing into the future. The problem with monopolies and price fixing is that it is illegal, it hinders entrepreneurs from bringing new value to the technology market and it is something that puts South African business on the back foot when trying to compete in the global market. Telecommunications are critical to business growth
16 Weeks ago The Town Crier wrote :
In simple terms: high cost of communication means a necessary tendency to hold back when it comes to communication. This does nothing towards the promotion of efficient business practice through employing healthy, timely communication. Let's face it; if ever any country in this era of high-tech communication has been dealt a totally strangling deal in this ultra-important facet of the business world, South Africa must be right at the top of the list of the criminally exploited. In fact, since the cellphone fraternity appeared on the scene, businesses have been dealt a serious blow to their overall efficiency. In fact, high-tech systems, at the hyper-inflated prices they have been made available to the business world, have played a huge part in leading the world economic conditions to where they are right now; the worst it has been in living memory if we are willing to be totally honest about the assessment. Of what use are all the hoarded billions that the fatcats of this world grab and so greedily hang on to. The time for the whole world to wake up has arrived. All the signs of what is in the pipeline are very clear. If the awakening does not take place, and with immediate effect, the whole world will die in its sleep. There are no other alternatives!
16 Weeks ago Annoyed wrote :
You need to look at the financial reports and you will figure out how these companies are more than doubling profits from over charging. Retrenching employees is not the issue as these people get paid peanuts compared to what the directors and board members collect. They are ripping us off and it has to stop!! Your comments have no bearings and are unfounded. We cannot condone what's happening, in our country we call it daylight robbery, not sure where you are from.
16 Weeks ago Anonymous wrote :
Has anyone looked into the rates these cellphone companies charge the corporate and local government users. I have heard that these rates are extremely low. Are we the public paying to support the fat cats again.
16 Weeks ago Franny wrote :
Even if interconnect fees are dropped this would not mean that call charges will be dropped by the same value. The only guys that will benifit is Cell C and Telkom seeing that the mejority of their cell/landline calls gets terminated either to Vodacom or MTN. We have to look in restricting the amount of Rands cellular companies can charge their customers (per minute) inrrespective of the interconnect fees.
16 Weeks ago Anonymous wrote :
I cannot believe that we have this huge investigation into the cell phone cost yet no one has the balls to administer a huge enquiry like this one into the Eskom hikes. I would rather go without cell phones than electricity.
16 Weeks ago Tashy wrote :
Hi there People of SA, You may think that these Cellular Networks are incorrectly billing you, but look at the bigger picture how people have these companies employed..?Cutting some of these rates may result in People getting retrenched, umemployement rate dropping, more thefts,hijackings etc because the cost of living is so high already..?I can assure you dropping these costs will ensure that Investors will not invest as much in the country or these companies, that allows to have competations like the MTN super 8,Vodacom Rugby cup,FIFA world cup for instance and all the investing in our communities...Lets not all just think about ourselves for once but for everyone in this country....Think of it in this way, Those people who can afford to give to charities you are giving in another way....Let me leave you people of SA something to Ponder about.
16 Weeks ago raysmith wrote :
The cellphone companies have been milking us dry for years and using their HUGE profits to fund expansion in other countries instead of improving their local service. The MTN CEO gets paid about R20 million a year. Why? Because he steers a company skilfully to rob us blind!!!
16 Weeks ago TOKYO3991 wrote :
Collusion between the cellular operators is a fact, not myth. They are unconscionable corporate thieves, beholden only to their greedy shareholders and bottomless back pockets. They state that reducing cellular costs "will jeopardise economic growth"...... if so, what does raping the man in the street with the highest cellular costs in the world do to our fragile third world economy?
16 Weeks ago E wrote :
I welcome the proposal of cutting the interconnect rates that the cellular providers are charging us as customer. South African's voice and data charges are much higher that the likes of America and Europe and needs to be regulated.
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