South African mobile service provider Cell C passed a complaint with the Competition Commission against mobile operators, MTN and Vodacom, for anti-competitive conduct.
The complaint was directed to the manner in which the mobile operators discriminate between their on-net and off-net effective prices, which has a direct impact on smaller operators’ ability to acquire new customers.
“The two dominant incumbents discount their effective on-net prices substantially while charging a premium for their customers to call off-net. This amounts to discriminatory pricing and is without doubt anti-competitive when adopted by dominant operators,” says Cell C CEO Alan Knott-Craig.
Cell C has been intensely competing on all fronts with the ultimate aim of driving down prices for the consumer, which is also beneficial for Cell C.
“Customers that call off-net are being penalized often without them realizing it. With number portability, customers don’t always know if they are calling on- or off-net anymore, so they don’t actually know what rate they are paying,” says Knott-Craig.
Regulators, in many mobile markets, are opposed to differential on-net and off-net pricing, and in some instances, dominant mobile network operators are facing stiff fines for this kind of discriminatory pricing, which locks in customers and prevents switching.