Shoppers que to enter the Telkom store at Mall@Reds in Centurion. Telkom urged Icasa to investigate the roaming deals of rivals MTN and Vodacom. Picture: Jacques Naude/African News Agency(ANA)
Shoppers que to enter the Telkom store at [email protected] in Centurion. Telkom urged Icasa to investigate the roaming deals of rivals MTN and Vodacom. Picture: Jacques Naude/African News Agency(ANA)

Telkom wants Icasa to investigate roaming deals of rivals MTN, Vodacom

By Dineo Faku Time of article published Oct 27, 2020

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JOHANNESBURG - Partially state-owned mobile operator Telkom yesterday urged the Independent Communications Authority of South Africa (Icasa) to investigate the roaming deals of rivals MTN and Vodacom, charging that effective competition was absent from the telecommunications sector.

Telkom’s head of regulatory affairs and government relations, Siyabonga Mahlangu, told Icasa’s hearing on the Discussion Document on Mobile Broadband Services Inquiry that the telecoms market was highly concentrated, with more than 80percent of earnings before interest, taxes, depreciation and amortisation generated by MTN and Vodacom for more than a decade. Mahlangu said later entrants to the market had not changed the status quo, and MTN and Vodacom had an advantage in the acquisition of sites and the cost-effective acquisition of customers, and had enjoyed favourable call termination rates until the intervention by the authorities.

“These mobiles have control over the best sites, have preferential spectrum assignment, have access to distribution channels, and there is a lack of pro-competitive regulations to keep them honest,” Mahlangu said.

He said Telkom had to contend with the fact that MTN and Vodacom had access to additional spectrum via network-sharing deals with smaller mobile operators.

“Although they are labelled as facilities leasing coupled with roaming, they are not that. They are a means through which the big operators can have additional access to spectrum, and therefore solidifies their position in the market,” Mahlangu said.

Through the inquiry, Icasa seeks to assess the state of competition in the provision of mobile broadband services. It follows the completion of the priority markets inquiry in 2018.

Icasa has maintained that the high cost of data services in South Africa remains a growing concern for consumers and the business environment, saying that while competition between operators meant that users acquired larger data bundles but did not pay more and mobile operators’ revenues were flat. Mahlangu said reports suggesting that Cell C was exiting the infrastructure market would put more pressure on Icasa and Telkom to ensure that the playing fields were levelled if competition was going to be maintained in the sector.

“The imposition of regulation by the authority can only be second best, because the market is dynamic and the players are going to ensure consumers benefit and prices are reflective of cost and are reflective of competition.

“We implore the authority to use this process to address the spectrum issue, because it is paramount, is important and it underscores mobile broadband,” Mahlangu said.

He said spectrum was integral in the promotion of competition in the mobile sector.

“It is the lifeblood of mobile broadband. We are saying because of the spectrum trading deals in the form of roaming and network sharing deals, it is no longer important to focus only on the spectrum, but it is important to focus on access to spectrum which determines competition we have in the market,” said Mahlangu.

Earlier this month, Telkom approached the Competition Tribunal to declare the suite of spectrum arrangements between Vodacom and Rain as a merger that should have been notifiable in terms of the Competition Act. Telkom contended that the merger was notifiable because the multiple agreements between Vodacom and Rain granted Vodacom use and control over the deployment of Rain’s spectrum, including the planning, rollout, maintenance and service of its radio access network.

The inquiry continues today.

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