Competition Commission Inquiry into Data Services Market

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[23 February 2025]

The Competition Commission presented its Data Services Market Inquiry (DSMI) outcomes to the Portfolio Committee for Communications and Digital Technologies on February 11, 2025, highlighting significant progress.

Highlights of the Commission’s work on Communications & Digital Technologies

Pricing and Access:

Vodacom and MTN agreed to 50% reductions in monthly prepaid data prices, provided free daily data, and zero-rated access to educational and government services.

Cell C and Telkom Mobile responded with their own price reductions.

Estimated savings for low-income consumers reached R4 billion in the first year, with further savings in the second year.

Over 1,100 sites were zero-rated.

Infrastructure and Regulation:

Openserve restructured and lowered wholesale fibre prices.

DSMI recommendations regarding MVNOs and other obligations were incorporated into ICASA’s March 2022 spectrum auction.

Recommendations to amend the Electronic Communications Act led to a draft Amendment Bill, currently with the Minister of Communications and Digital Technologies, which the Commission strongly supports.

The Commission emphasized the importance of releasing spectrum.

[4 December 2020]

The Commission has revised the timelines for implementing certain recommendations outlined in the final report of its Market Inquiry into Data Services.

Competition Commission Data Services Market Inquiry: Revised Timelines for Recommendations

The updated timelines are as follows:

The timeline for legislative changes to the ECA by the DCDT, initially set for 12 months, has been extended to 24 months.
The timeline for regulatory changes by ICASA, originally set for 18 months, has been extended to 30 months, allowing an additional 6 months after legislative changes have been enacted.

[14 March 2020]

The Commission announced on 10 March 2020 that it had reached a consent or settlement agreement with Vodacom.

Vodacom Consent Agreement (Commissioner’s Press Conference Notes)

[3 February 2020]

The Commission has issued a media update on its discussions with mobile network operators, resulting in a 1-month extension of the deadline from 2 February 2020 to 2 March 2020.

Media Statement

[19 December 2019]

Below is a table outlining the deadlines for the implementation of the Competition Commission’s Final Report recommendations from the Data Services Market Inquiry.

Implementation of Competition Commission Data Services Market Inquiry Recommendations

Recommendation	Deadline
Vodacom and MTN must independently agree with the Commission on significant and immediate tariff reductions, particularly for prepaid monthly bundles, within two months.	2 March 2020 (previously 2 February 2020)
Vodacom and MTN must agree within two months to reduce the headline prices of all sub-500MB 30-day prepaid data bundles, ensuring cost parity with the 500MB bundle or reflecting cost-based differences, and end partitioning strategies that result in anti-poor pricing or inferior service outcomes.	2 March 2020 (previously 2 February 2020)
All mobile operators must agree with the Commission within three months to offer all prepaid customers a lifeline package of daily free data, ensuring continuous access to data for all citizens, regardless of income levels.	2 March 2020
This agreement must be formalized through legislative or regulatory measures within six months.	2 June 2020
All mobile operators must agree within three months on a consistent industry-wide approach to zero-rating content from public benefit organizations and educational institutions to ensure broad application.	2 March 2020
ICASA must give this agreement formal regulatory status through the ICASA End-User and Subscriber Service Charter within six months.	2 June 2020
All mobile operators must agree with the Commission within three months to inform each subscriber, monthly, of the effective price for all data consumed.	2 March 2020
ICASA must give formal regulatory status to this agreement in the ICASA End-User and Subscriber Service Charter within six months.	2 June 2020
Telkom Openserve must agree with the Commission within two months on significant reductions in the price of IP Connect to address excessive pricing concerns.	2 February 2020

[12 December 2019]

The Commission has released the full report of its final findings and recommendations from its Market Inquiry into Data Services.

Data Service Market Inquiry – Final Report

[2 December 2019]

The Commission has published a summary of its final findings and recommendations from its Market Inquiry into Data Services.

Data Service Market Inquiry – Summary of Final Findings and Recommendations

To summarize the summary…

Short-term measures: The Commission set out the following immediate consumer relief actions:

Vodacom and MTN must independently agree with the Commission on:
- Significant and immediate reductions in tariff levels, particularly for prepaid monthly bundles, within two months of the report’s release. Preliminary evidence indicates potential price reductions between 30% and 50%.
- A reduction in the headline prices of all sub-500MB 30-day prepaid data bundles to match the cost per MB of the 500MB bundle or reflect cost-based differences.
- The cessation of partitioning and price discrimination strategies that may exacerbate market power exploitation and anti-poor pricing.
All mobile operators must agree within three months to provide all prepaid subscribers with a daily free data lifeline package, ensuring continuous data access for all citizens, regardless of income. The size of this package will be determined in consultation with the industry, ICASA, and relevant experts. This agreement must be formalized through legislative or regulatory measures within six months, with one suggestion being to include it as an obligation on successful high-demand spectrum bidders.
All mobile operators must agree within three months on a consistent industry-wide approach to zero-rating content from public benefit organizations (PBOs) and educational institutions to ensure broad application. ICASA has six months to require this in the End-User and Subscriber Service Charter Regulations, including a prescribed list of PBOs/educational institutions that have applied and been approved for “zero-rating status.”
All mobile operators must agree within three months to inform each subscriber, monthly, of the effective price for all data consumed. ICASA has six months to require this in the End-User and Subscriber Service Charter Regulations.
Telkom Openserve must agree with the Commission within two months on “significant reductions” in the price of IP Connect to address excessive pricing concerns.

The Commission emphasized that failure to meet these deadlines will result in prosecution under the relevant sections of the Act. It also highlighted its close collaboration with ICASA and its contributions to processes regarding high-demand spectrum and mobile broadband services. This collaboration includes:

Licensing of the WOAN: Ensuring a commercially viable consortium secures the license, with cost-oriented access to facilities and national roaming, a spectrum fee holiday, and appropriate regulatory oversight, including non-discrimination at a minimum, or more if an existing operator is licensed.
Licensing of remaining spectrum: Imposing spectrum caps on the two largest operators, ensuring wholesale open access at cost-oriented prices to their facilities, and mandating social obligations, including a lifeline data package for all South Africans, with cost reductions passed on to consumers.

Medium-term strategies to enhance price-based competition in mobile markets: The Commission recommended the following:

Legislative amendments should facilitate cost-based access to facilities, including pricing standards for different types of facilities, e.g., cost plus a fair return for essential facilities vs. a less stringent standard for non-essential facilities.
ICASA should use its powers under the Electronic Communications Act to define essential facilities and have the necessary legislation in place within 18 months.
Vodacom and MTN must reach an agreement with the Commission within six months to ensure that their national roaming agreements with other networks are priced, at a minimum, at wholesale rates reflecting a reasonable discount on their own effective retail rates, with annual downward revisions based on reductions in their retail rates. If no agreement is reached, the Commission will proceed with prosecution for excessive pricing and/or exclusionary practices. Minimum pricing standards for national roaming should be incorporated into legislative amendments, giving ICASA the authority to regulate these agreements.
All mobile operators must agree with the Commission to ensure that the wholesale rate reflects a discount on the prevailing effective retail rate. If no agreement is reached, the Commission will consider prosecution. Ultimately, minimum pricing standards for MVNOs and wholesale access should be incorporated into legislative amendments, with ICASA having the authority to regulate these agreements.
Vodacom and MTN must agree with the Commission to implement accounting separation for their wholesale network infrastructure, including the radio access network (RAN) and core network, within the next year. Additionally, the Commission recommends that ICASA reintroduce regulatory accounting reporting requirements for Vodacom, MTN, and Telkom Openserve within six months.
The DTPS should initiate policy and legislative reforms to incorporate the above legislative changes, support ICASA’s ongoing regulatory functions, and facilitate rapid infrastructure rollout.
An amendment to the ECA should be fast-tracked over the next 12 months, with the Commission recommending the following changes:
- Amendments to section 67 of the ECA to ensure that the prerequisites for regulatory action are proportionate to the type of regulatory action, allowing ICASA to regulate based on findings by the Commission, other relevant regulators, or courts.
- Provision for the regulation of national roaming and MVNO agreements by ICASA.
- Introduction of principles for access and price regulation for the leasing of facilities.
- Implementation of a rapid infrastructure deployment strategy, including restrictions on municipal charges and conditions for granting such wayleaves.

To promote the development of alternative infrastructure for data services in low-income areas and smaller secondary cities and towns, the Commission recommended:

National government should consider providing investment incentives to FTTH providers for network rollout in low-income areas.
Government should promote free public Wi-Fi in low-income areas.
ICASA should explore models and regulatory changes to allow non-profit community networks and possibly small commercial enterprises to access licensed spectrum not used by mobile operators in rural areas.
A single government department or agency should be designated to drive these initiatives across different departments and levels of government.

[2 May 2019]

We have obtained the full 288-page report:

Data Services Inquiry Provisional Report

[27 April 2019]

ICASA has issued a media statement welcoming the provisional findings and recommendations by the Competition Commission following its Data Services Market Inquiry:

ICASA Media Statement

[24 April 2019]

The Competition Commission has released a provisional report from its Data Services Market Inquiry.

Competition Commission Data Services Market Inquiry – Summary of Provisional Findings and Recommendations

Interested parties have until 14 June 2019 to submit feedback on the provisional findings and recommendations, which include:

The Commission conducted an international benchmarking exercise on local mobile data prices and concluded that local prices, especially in the prepaid market, are relatively high.
The Commission found a lack of transparency in data pricing, with consumers often paying more per MB for smaller data bundles.
The report highlighted the use of “out-of-bundle” rates by mobile operators, which are significantly higher than in-bundle rates.
Recommendations include measures to reduce data prices, improve transparency, and provide a lifeline package of free data to low-income consumers.

[29 March 2019]

The Competition Commission has announced an additional extension for finalizing the Inquiry, with the completion report now expected by 31 December 2019, and an interim report to be submitted by 30 April 2019. The Commission will seek public feedback on the interim report.

Updated Terms of Reference for the Data Services Market Inquiry

[26 March 2019]

Below are the transcripts from the public hearings concerning the Competition Commission’s Data Services Market Inquiry, which took place in October 2018:

[19 October 2018]

Please find below the presentations given at the public hearings:

[5 October 2018]

The Commission has released a media statement regarding market concentration in South Africa’s Product Markets, referencing a working paper released earlier this year. The investigation’s findings – based on merger report analysis since 2009 – reveal that the “information communication technologies” sector is the most concentrated product market by a significant margin.

The extent of market concentration in South Africa’s product markets CC Working Paper

CC MR Market Concentration in product markets 5 October 2018

[15 September 2018]

The Commission is set to conduct public hearings on the Inquiry from 17-19 October 2018 at its Pretoria offices.

Participants must:

Confirm their participation by 21 September 2018 to datainquiry@compcom.co.za
Submit written comments by 11 October 2018 to the same address.

Data Services Market Inquiry – Public Hearings Notice

Submissions should address:

Are data prices in South Africa (mobile, fixed, etc.) higher than expected?
If so, what factors contribute to these high prices?
What remedies could be effective?
How do data prices affect lower-income individuals, rural residents, small businesses, and the unemployed? How crucial are affordable data prices for these groups?

Previous submissions (November 2017) to the Commission are listed below:

[3 September 2018]

The Commission has issued a notice indicating that it requires until 31 March 2019 to finalize its analysis and further stakeholder consultations. It also plans to hold public hearings.

Competition Act – Data Services Market Inquiry – Amendments to Terms of Reference

[23 September 2017]

The Competition Commission has called for public submissions to aid its inquiry into data prices in South Africa. The aim is to identify factors leading to high data prices and to propose recommendations for reducing them.

Call for Submissions: Data Services Market Inquiry

Submissions are due by 1 November 2017 and should be sent to datainquiry@compcom.co.za.

Submissions must include a completed DSI-1 Form – “Registration Form for Written Submission” – and adhere to the Data Services Market Inquiry Guidelines and Terms of Reference.

The Commission has listed questions to address, but submissions on any relevant issues regarding data communication costs in South Africa are welcome.

Guideline questions:

Data Prices and Services in South Africa

Current research suggests that data prices in South Africa are high compared to other countries. Please respond to the following:

How do South African data prices compare internationally?
Which specific data markets or services have high prices in South Africa? Provide evidence.
What are the main causes for these high prices? Consider cost, competition, or regulatory issues and provide evidence.
List the data services you use and detail the following:
- Products/services used;
- Usage as a private consumer or business/organization;
- Service providers;
- Pricing and contract details.

Data Services Value Chain

Describe the data services value chain including:

Levels of the chain and their activities;
Stakeholders at each level;
Commercial relationships and connections to the ICT sector and broader economy.

State of Competition in Data Services

Discuss how firms behave in data services markets, including:

Monopolies or firms with market power;
Any unfair or anti-competitive practices.

Telecommunications Regulation and Spectrum Allocation

Address the following:

Impact of the regulatory environment on data pricing, competition, and entry potential.
Roles of ICASA, DTPS, DOC, and other bodies regarding data prices.
Recent regulatory changes and their effects on data pricing.

Spectrum

Discuss spectrum access and its impact on competition, costs, and data service pricing.

Data Supply Quality and Coverage

Respond to:

Is data supply quality and coverage in South Africa adequate by international standards and development needs?
How are low-income, under-developed, or rural areas affected?

Further Submissions

Provide any additional issues relevant to data service prices in South Africa and include verifiable evidence.

[18 August 2017]

The Competition Commission has announced its intention to start an inquiry into the data services market, as detailed in the Government Gazette’s terms of reference.

Competition Act: Terms of Reference: Data Services Market Inquiry 18 August 2017

The Data Service Market Inquiry will start on 18 September 2017 following a request from the Minister of Economic Development due to concerns over high data costs in South Africa. The Commission aims to investigate market features causing high data prices and make recommendations for lowering them.

The inquiry’s objectives include:

Understanding the data services value chain and its interaction with the ICT sector and economy.
Assessing competition at all levels of the value chain and identifying factors influencing competition and pricing.
Comparing South African data pricing with other countries.
Evaluating the adequacy of data supply quality and coverage.

The final report will provide recommendations to both government and sector regulators on enhancing market competition and lowering data prices, with completion expected by 31 August 2018.

Competition Commission Inquiry into Data Services Market

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