FINAL CALL ON DATA SQUEEZES THE BIG ONES

Data is important for economic activity. Cheaper data gives more people access to internet services and more opportunities to make money.

the Competition Commission’s extension of the two-month deadline for Vodacom and MTN to negotiate data price reductions just delays the inevitable – that data prices are coming down, while pressure on the profit margins of the listed telecoms companies will surely increase.

But this does not necessarily spell the end of good returns for telecoms investors in companies such as Vodacom, MTN, Telkom and Blue Label (which holds 45% of Cell C).

The commission’s December findings, after two years of investigation, require Vodacom and MTN to come to agreements with it to reduce data prices, including prepaid data and monthly bundles, which the commission found prohibitive and anti-poor. The commission, which also called for infrastructure to be regulated, indicated there was scope to reduce prices by 30% to 50%.

MTN responded,