After a massive selloff on Monday, shares of South Africa’s biggest listed telecommunications companies continued to trade lower into Tuesday.

Shares in MTN and Vodacom fell sharply on Monday — cutting their combined market values by more than R20-billion — after the Competition Commission published a radical set of plans to intervene in the market for data services, including a threat to prosecute the companies if they don’t immediately drop data prices.

The carnage continued on Tuesday, with Telkom and Cell C shareholder Blue Label Telecoms bearing the brunt of the selling pressure.

Just before 2pm, Telkom was trading down 5% at R42.70, after earlier falling to R41.98, the lowest level for the partially privatised former fixed-line monopoly in five-and-a-half years. Telkom has shed 57% of its value since its peak of R100/share in June.

Blue Label Telecoms was off 7.9% at R2.79/share, though the selling pressure there could in part be related to a report on Monday that Cell C debt holders are lobbying for the company to be sold to Telkom, which could imperil the long-planned recapitalisation being negotiated with the Buffet Group and other investors.

Vodacom was trading off 1.1% at R113.80, while MTN was down 0.4% at R86.11. The JSE Top 40 Index was off by 0.7%.

Interventions

Other than the demand that Vodacom and MTN cut data prices, the Competition Commission report included a requirement that all mobile operators be forced to give South Africans a free allocation of daily data — the quantum of which was still to be determined.

Another demand made be the commission was that there be cost-based access to network facilities and that communications regulator Icasa should define essential facilities so access to these can be regulated, including the price that is charged for them.

Also, national roaming agreements should be based on wholesale costs and prices offered by roaming providers to other operators should be lower than their own retail prices, with annual downward revisions.