Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      Legislative overhaul on the cards for South Africa’s ICT sector

      14 July 2025

      The 1940s visionary who imagined the Information Age

      14 July 2025

      Trump tariffs could wreck South Africa’s vehicle manufacturing industry

      14 July 2025

      Microsoft South Africa to get new MD as Lillian Barnard moves to regional role

      14 July 2025

      Zuckerberg used open source to scale AI – now the lock-in begins

      14 July 2025
    • World

      Grok 4 arrives with bold claims and fresh controversy

      10 July 2025

      Bitcoin pushes higher into record territory

      10 July 2025

      Cupertino vs Brussels: Apple challenges Big Tech crackdown

      7 July 2025

      Grammarly acquires e-mail start-up Superhuman

      1 July 2025

      Apple considers ditching its own AI in Siri overhaul

      1 July 2025
    • In-depth

      Siemens is battling Big Tech for AI supremacy in factories

      24 June 2025

      The algorithm will sing now: why musicians should be worried about AI

      20 June 2025

      Meta bets $72-billion on AI – and investors love it

      17 June 2025

      MultiChoice may unbundle SuperSport from DStv

      12 June 2025

      Grok promised bias-free chat. Then came the edits

      2 June 2025
    • TCS

      TCS+ | MVNX on the opportunities in South Africa’s booming MVNO market

      11 July 2025

      TCS | Connecting Saffas – Renier Lombard on The Lekker Network

      7 July 2025

      TechCentral Nexus S0E4: Takealot’s big Post Office jobs plan

      4 July 2025

      TCS | Tech, townships and tenacity: Spar’s plan to win with Spar2U

      3 July 2025

      TCS+ | First Distribution on the latest and greatest cloud technologies

      27 June 2025
    • Opinion

      In defence of equity alternatives for BEE

      30 June 2025

      E-commerce in ICT distribution: enabler or disruptor?

      30 June 2025

      South Africa pioneered drone laws a decade ago – now it must catch up

      17 June 2025

      AI and the future of ICT distribution

      16 June 2025

      Singapore soared – why can’t we? Lessons South Africa refuses to learn

      13 June 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CambriLearn
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » News » Commission mulls ‘functional separation’ at Vodacom, MTN

    Commission mulls ‘functional separation’ at Vodacom, MTN

    By Duncan McLeod24 April 2019
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    The Competition Commission has floated the idea of enforcing functional and/or accounting separation on South Africa’s large mobile operators — a move that would not be dissimilar to what it required of Telkom a few years ago — to promote competition in the mobile broadband industry in South Africa and bring down prices.

    This is one of a wide range of possible interventions proposed in the commission’s provisional findings and recommendations following its inquiry into the data services market. The details were announced at a media conference in Pretoria on Wednesday.

    Though the commission doesn’t specifically name MTN and Vodacom in the context of functional and accounting separation, it’s clear it is referring to these two companies in its findings. The share prices of both companies fell sharply in afternoon trading on the JSE.

    Some form of functional and/or accounting separation may be required of the larger networks…

    If implemented, this regulator-imposed separation should facilitate the entry of new mobile virtual network operators (MVNOs), which piggyback on network infrastructure providers, the commission said. To date, only Cell C offers wholesale services to MVNOs.

    Though government’s proposed wholesale open-access network (Woan) is one way to address what the commission calls “market failure”, more immediate regulatory intervention is required while the Woan is being established.

    “Some form of functional and/or accounting separation may be required of the larger networks if there is to be greater transparency as to the costs of the radio access network and core network relative to the retail services,” the commission said.

    Lessons from Telkom settlement

    “Such separation may also provide more appropriate incentives to the network layer to engage in fairer access pricing to third parties relative to the operator’s own retail division. These are certainly some of the lessons from the Telkom settlement agreement with the commission, which is widely perceived as having had a transformative impact on wholesale infrastructure access in fixed lines.”

    Commissioner Tembinkosi Bonakele emphasised that no decision has been taken on functional or accounting separation. “We have put it in the basket — it’s one of the options,” he said in response to a question from TechCentral. “We are not saying it will be in the final recommendations. If there are other measures … maybe functional separation is not necessary.”

    The commission has proposed a number of other short-term and intermediate interventions, including the urgent allocation of additional radio frequency spectrum to operators.

    “In the assignment of spectrum by (communications regulator) Icasa, the objective should be to improve affordability and enhance competition,” the commission said in the provisional report. “Any assignment should be contingent upon obligations to pass through cost reductions from greater spectrum access, alongside other obligations to improve affordable access.”

    This, it said, could include the provision of free public Wi-Fi in some lower-income areas, including commuter routes, or the extension of fibre backhaul infrastructure to such areas. “Pro-competitive assignment may include spectrum caps on larger operators, asymmetric assignments and set-asides for new entrants such as the Woan, in a manner that ensures a prospect of commercial success.”

    The provisional report, released two weeks before South Africa goes to the polls, follows the launch of the inquiry in August 2017 in response to a request by economic development minister Ebrahim Patel. “This request followed persistent public concerns about the high cost of data in South Africa,” Bonakele said at Wednesday’s media conference.

    The commission found that mobile data prices in South Africa are high when benchmarked against a wide selection of countries

    The purpose, Bonakele said, was to assess the state of competition “in every stage of the value chain for the provision of data services to identify areas of market power where consumers might be exploited or excluded … or determine other structural, behavioural or regulatory issues that might impact pricing”.

    The commission found that mobile data prices in South Africa are high when benchmarked against a wide selection of countries, including other countries in Africa. The country, it said, compares poorly with other members of the Southern African Development Community and other members of the so-called Brics countries (Brazil, Russia, India, China and South Africa).

    “The retail pricing structure is anti-poor and lacks transparency,” said Bonakele. Lower-income consumers pay disproportionately more per megabyte than high-income users, he said. This can be as much as four times more for those buying small data bundles.

    Bonakele said the operators’ pricing also lacks transparency.

    Interested stakeholders have until 14 June to make written submissions on the commission’s report. The commission will then have “further engagements” before publishing the final report. – © 2019 NewsCentral Media



    Competition Commission James Hodge MTN Telkom Tembinkosi Bonakele top Vodacom Woan
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleVodacom, MTN shares tumble on commission findings
    Next Article Microsoft on a tear as cloud business soars

    Related Posts

    Spam call epidemic: operators say their hands are tied

    10 July 2025

    Vodacom, Maziv deal now looks likely after CompCom U-turn

    8 July 2025

    Sasol, Vodacom team up to modernise Secunda operations

    4 July 2025
    Company News

    Banking on LEO: Q-KON transforms financial services connectivity

    14 July 2025

    The future of business calling: Voys brings your landline to the cloud

    14 July 2025

    How digital twins and AI are shaping the future of security

    14 July 2025
    Opinion

    In defence of equity alternatives for BEE

    30 June 2025

    E-commerce in ICT distribution: enabler or disruptor?

    30 June 2025

    South Africa pioneered drone laws a decade ago – now it must catch up

    17 June 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.