March 10, 2020 / 10:19 AM / 23 days ago

UPDATE 1-South Africa's Vodacom to slash mobile data prices after watchdog report

(Adds details, quote from Vodacom)

PRETORIA, March 10 (Reuters) - South African telecoms firm Vodacom Group has agreed to reduce the cost of its data offerings by as much as 40%, following a finding that the country’s mobile data prices were the highest on the continent, the watchdog said on Tuesday.

In December the competition watchdog warned that Vodacom and rival MTN faced prosecution if they did not agree to cut data prices within two months of the findings.

The inquiry into data services, launched in August 2017 and published late last year, found prices charged by the top two operators in South Africa were higher than in other African markets in which they were operating. The same was true when comparing local data costs with those outside Africa.

Vodacom and MTN argued that such comparisons were uninformative because cost and quality differed across countries, including spectrum allocations, and that this could account for the price variations.

The two firms dominate South Africa’s wireless broadband market, controlling around 70%.

Vodacom Chief Executive Shameel Joosub said at the press conference where the decision was announced that the company would cut the price of its most popular mobile, pay-as-you-go data package to 99 rand ($6.25) from 149 rand ($9.41).

“In terms of the agreement, and following confirmation by the Tribunal, Vodacom will introduce price reductions across all its monthly bundles and provide free access to basic internet, essential services and cheaper pricing to the poorest communities,” Joosub said.

The commission said it was in “advanced negotiations” with MTN and Telkom about implementing the price reductions.

$1 = 15.8399 rand Reporting by Nqobile Dludla, editing by Louise Heavens and Emelia Sithole-Matarise

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