Explain competition commisison's recommendation regarding vodacom prices
Answers
The Competition Commission has reached a significant agreement with Vodacom to reduce the costs of data and promote digital inclusion.
The agreement was announced at a media briefing with Vodacom in Johannesburg.
Competition Commissioner, Tembinkosi Bonakele, emphasized that the agreement is subject to confirmation by the Competition Tribunal.
It was also made clear that certain specific details of the agreement are confidential to protect competition in the market.
In a statement, the Commission confirmed that Vodacom has agreed to a multi-year substantial reduction of monthly data bundles across the board.
“Effective from 01 April 2020 price will come down by over 30% across all channels. For an example, the key 1GB monthly data bundle will drop from R149 per 1 Gigabyte to no more than R99 (including VAT). This represents a 34% price decrease.”
Other key features of the agreement include making available all current zero-rated services on one platform with increased focus on consumers in poorer communities via “ConnectU”, extending current zero-rating to essential state and emergency specified sites to be phased in within two months from 1 April, improving customer awareness of the personalized price promotions, displaying the cents/MB for all data bundles offered in relevant channels and enabling prepaid consumers to access detailed information on their historic purchases and what their data was used on.
The agreement flows from the Data Services Market Inquiry Final Report released in December 2019.
The Competition Commission initiated the Inquiry in August 2017.
At the time, the Competition Commission declared that the Inquiry will cover all “relevant players in the value chain who contribute to or influence prices of data services in South Africa.”
High data costs was a key determinant in calling for the Inquiry.
The aim of the Inquiry was 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.”
In a statement following the release of the report, the trade and industry department indicated that key findings of the Inquiry were that the price of data in South Africa was high compared to many other countries and profitability for mobile network operators (MNOs) in South Africa exceeds that of MNOs in similar markets.
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Answer:
The Competition Commission has reached a significant agreement with Vodacom to reduce the costs of data and promote digital
inclusion. The agreement was announced at a media
briefing with Vodacom in Johannesburg.
Competition Commissioner, Tembinkosi Bonakele, emphasized that the agreement is subject to confirmation by the Competition Tribunal.
It was also made clear that certain specific details of the agreement are confidential to protect competition in the market.
In a statement, the Commission confirmed
that Vodacom has agreed to a multi-year
substantial reduction of monthly data
bundles across the board.
"Effective from 01 April 2020 price will come down by over 30% across all channels. For an example, the key 1GB monthly data bundle will drop from R149 per 1 Gigabyte to no more than R99 (including VAT). This represents a 34% price decrease."
Other key features of the agreement include making available all current zero-rated services on one platform with increased focus on consumers in poorer communities via "ConnectU", extending current zero-rating to essential state and emergency specified sites to be phased in within two months from 1 April, improving customer awareness of the personalized price promotions, displaying the cents/ MB for all data bundles offered in relevant channels and enabling prepaid consumers to access detailed information on their historic purchases and what their data was used on.
The agreement flows from the Data Services
Market Inquiry Final Report released in
December 2019. The Competition Commission initiated the
Inquiry in August 2017.
At the time, the Competition Commission declared that the Inquiry will cover all "relevant players in the value chain who contribute to or influence prices of data services in South Africa."
High data costs was a key determinant in calling for the Inquiry.
The aim of the Inquiry was 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."
In a statement following the release of the report, the trade and industry department indicated that key findings of the Inquiry were that the price of data in South Africa was high compared to many other countries and profitability for mobile network operators (MNOS) in South Africa exceeds that of MNOS in similar markets.
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