TechCentralTechCentral
    Facebook Twitter YouTube LinkedIn
    Facebook Twitter LinkedIn YouTube
    TechCentralTechCentral
    NEWSLETTER
    • News

      Consortium makes unsolicited bid for state’s 40% stake in Telkom

      12 August 2022

      Actually, solar users should pay more to access the grid – here’s why

      12 August 2022

      Fixing SA’s power crisis is not complex: it simply takes the will to do better

      12 August 2022

      Telkom says MTN talks remain on track

      12 August 2022

      Analysis | Rain muddies the waters with approach to Telkom

      11 August 2022
    • World

      Huawei just booked its first sales rise since US blacklisting

      12 August 2022

      Apple remains upbeat about iPhone sales even as Android world suffers

      12 August 2022

      Ether at two-month high as upgrade to blockchain passes major test

      12 August 2022

      Gaming industry’s fortunes fade as pandemic ends

      11 August 2022

      Disney tops Netflix in streaming subscribers

      11 August 2022
    • In-depth

      African unicorn Flutterwave battles fires on multiple fronts

      11 August 2022

      The length of Earth’s days has been increasing – and no one knows why

      7 August 2022

      As Facebook fades, the Mad Men of advertising stage a comeback

      2 August 2022

      Crypto breaks the rules. That’s the point

      27 July 2022

      E-mail scams are getting chillingly personal

      17 July 2022
    • Podcasts

      Qush on infosec: why prevention is always better than cure

      11 August 2022

      e4’s Adri Führi on encouraging more women into tech careers

      10 August 2022

      How South Africa can woo more women into tech

      4 August 2022

      Book and check-in via WhatsApp? FlySafair is on it

      28 July 2022

      Interview: Why Dell’s next-gen PowerEdge servers change the game

      28 July 2022
    • Opinion

      No reason South Africa should have a shortage of electricity: Ramaphosa

      11 July 2022

      Ntshavheni’s bias against the private sector

      8 July 2022

      South Africa can no longer rely on Eskom alone

      4 July 2022

      Has South Africa’s advertising industry lost its way?

      21 June 2022

      Rob Lith: What Icasa’s spectrum auction means for SA companies

      13 June 2022
    • Company Hubs
      • 1-grid
      • Altron Document Solutions
      • Amplitude
      • Atvance Intellect
      • Axiz
      • BOATech
      • CallMiner
      • Digital Generation
      • E4
      • ESET
      • Euphoria Telecom
      • IBM
      • Kyocera Document Solutions
      • Microsoft
      • Nutanix
      • One Trust
      • Pinnacle
      • Skybox Security
      • SkyWire
      • Tarsus on Demand
      • Videri Digital
      • Zendesk
    • Sections
      • Banking
      • Broadcasting and Media
      • Cloud computing
      • Consumer electronics
      • Cryptocurrencies
      • Education and skills
      • Energy
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Motoring and transport
      • Public sector
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Advertise
    TechCentralTechCentral
    Home»News»‘Enduring’ mobile duopoly has harmed consumers: Telkom CEO

    ‘Enduring’ mobile duopoly has harmed consumers: Telkom CEO

    News By Duncan McLeod18 October 2018
    Facebook Twitter LinkedIn WhatsApp Telegram Email
    Sipho Maseko

    Regulators should lend more support to smaller mobile operators to help them break the dominance of Vodacom and MTN, Telkom CEO Sipho Maseko told the Competition Commission on Thursday.

    Speaking at the commission’s inquiry into the data services market, Maseko said Telkom Mobile and Cell C have “not been able to build significant market share” despite aggressive pricing relative to their bigger rivals.

    The solution, he said, is to promote competition while ensuring that policy and regulatory decisions don’t make Vodacom and MTN stronger at the expense of smaller providers. “Competition, over time, is the best possible instrument” to bring down the cost to communicate. This will “deconcentrate” the market and lead to more pressure to bring prices down while still ensuring that operators can make sustainable returns.

    We have found it difficult to close the market-share gap that exists between ourselves and the larger, dominant players

    South Africa’s mobile sector “doesn’t necessarily” need more entrants or detailed price regulations. Rather, what’s needed, Maseko said, is an environment in which smaller operators can compete on an equal footing. This can be done through regulatory instruments such as termination rates — the fees operators can charge each other to carry calls between their networks.

    The problem in the mobile sector is there has been a long period of “enduring dominance” by two players, which has been “detrimental to consumers and to competition”, he said.

    Among measures that Telkom believes should be looked at include improving number portability regulations to make it easier for consumers to switch networks; regulating access to operators’ infrastructure; and assigning sub-1GHz radio frequency spectrum to players who don’t have it currently.

    Telkom is the only one of the four major mobile providers in South Africa that does not have access to spectrum below 1GHz, making it more expensive for it to roll-out infrastructure, Maseko said. Lower frequencies require fewer base stations, especially outside the dense urban areas.

    Lack of competition

    “We have found it difficult to close the market-share gap that exists between ourselves and the larger, dominant players,” Maseko told the commission.

    He said there is now “intense” competition in the fixed-line broadband market, where “barriers to entry are low and where there are a lot of new entrants”.

    “On the mobile side, there hasn’t been such intense competition as there has been in fixed.”

    He said about three-quarters of all broadband connections in South Africa belong to either Vodacom or MTN. Fixed access, on the other hand, makes up a tiny percentage of the overall market, with copper-based digital subscriber line technology accounting for about 3% and fibre for about 1%. “So, not only is it small, it’s very, very competitive.”

    The mobile market, on the other hand, has been “static for a long time”. Vodacom and MTN attained their dominant positions early on and benefited from “asymmetry” in terms of which Telkom paid them more than they paid it to facilitate competition in the market. That made sense when Telkom was “the only game in town”, but no longer.

    “(The asymmetry) was about R1/call. That has narrowed in the last five years, but for a solid 20 years that asymmetry was free cash that flowed from Telkom to the dominant players,” Maseko said. “This enabled them to invest and meet customer requirements regarding coverage and quality.

    Telkom, he added, has invested R11-billion in its mobile network but has been able to secure only about 5% market share. “Cell C’s subscriber base has grown by just two percentage points since 2011. Rain entered in 2017 but remains very small. Despite all the investments that have been made … the subscriber market share has largely not changed. We really need to interrogate that.”

    Vodacom and MTN’s retail prices have not been sufficiently constrained by competition, Maseko said.  — © 2018 NewsCentral Media

    Cell C Competition Commission MTN Sipho Maseko Telkom top Vodacom
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email
    Previous ArticleOur prices will tumble when we get more spectrum: MTN
    Next Article Icasa messed up in not blocking Vodacom, Rain deal: Cell C

    Related Posts

    Huawei just booked its first sales rise since US blacklisting

    12 August 2022

    Consortium makes unsolicited bid for state’s 40% stake in Telkom

    12 August 2022

    Actually, solar users should pay more to access the grid – here’s why

    12 August 2022
    Add A Comment

    Comments are closed.

    Promoted

    Pricing Beyond CMYK: printers answer the FAQs

    11 August 2022

    How secure is your cloud?

    10 August 2022

    5 ways to make attack-path management more manageable

    10 August 2022
    Opinion

    No reason South Africa should have a shortage of electricity: Ramaphosa

    11 July 2022

    Ntshavheni’s bias against the private sector

    8 July 2022

    South Africa can no longer rely on Eskom alone

    4 July 2022

    Subscribe to Updates

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

    © 2009 - 2022 NewsCentral Media

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