Competition Commission initiates Data Services Market Inquiry

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The Competition Commission (Commission) has announced that it will be conducting a market inquiry into the market for data services in South Africa (the Inquiry). On 18 August 2017, Terms of Reference (ToR) were published setting out the scope of the Inquiry and expected timeframes.

The ToR state that the Inquiry is being conducted in response to a request from the Minister of Economic Development, Ebrahim Patel (the Minister). The Minister's concerns relate to the importance of data affordability for the economy and consumers in South Africa.

The ToR states that the purpose of the Inquiry is to understand what factors or features of the market(s) and value chain may cause or lead to high prices for data services, and to make recommendations that would result in lower prices for data services. In terms of the ToR, the Inquiry will cover "all market participants involved at any point in the value chain for any form of data services" that are provided to customers such as government, businesses and end-consumers in South Africa.

The Inquiry will, among other things, assess the following:

  • market structure;
  • the general adequacy and impact of the current regulatory regime;
  • strategic behaviour by large fixed and mobile incumbents;
  • investment in infrastructure by operators and access to / allocation of spectrum as they relate to data services price and competition concerns; and
  • the adequacy of regulation to promote new South African entrants (particularly historically disadvantaged individuals).

The Inquiry is expected to commence on 18 September 2017 and is likely to be completed by 31 August 2018. This Inquiry, the second market inquiry launched this year, demonstrates the Commission's relentless determination to probe competition concerns across all industries in South Africa.

Access a copy of the ToR here