A Mobile Telecoms Perspective Part 2

A Mobile Telecoms Perspective Part 2

ICASA TAKES STRONG STANCE AGAINST HIGH TARIFFS.

In our previous note, we explained how the structure of the local mobile telecoms industry has led to inefficient outcomes for consumers.  An effective duopoly of MTN and Vodacom has resulted in pricing and tariffs that are amongst the highest in the world.  We showed high mobile termination rates (MTRs) to be the key driver of this industry structure as they create an almost insurmountable barrier to entry for both new and small operators who are not able to use price as a competitive tool.  The situation is further exacerbated by larger operators offering lower prices for on-net calls compared to off-net calls, resulting in an impenetrable network effect.  This is the reason why the top 2 operators generate more than 90% of the local mobile industry revenue.  The upshot of new and small operators failing to gain critical share of market is an industry that exists without price discovery.

READ THE FULL ARTICLE HERE

Leave a Comment

Name (required)
Email (required)
Comment (required)

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>