(The full version of this bulletin was originally published on Fasken.com – “The Competition Commission’s Market Inquiry into Data Services” – September 12th, 2017.)

On 18 September 2017, the Competition Commission is expected to commence a market inquiry into data services in South Africa. This is the sixth market inquiry to be initiated by the Commission.

The inquiry comes after public submissions to Parliament that South Africa’s data costs are high relative to other developed and developing countries, with the burden falling disproportionately on the poor. In his 2017 State of the Nation Address, President Jacob Zuma assured the public that “the lowering of the cost of data is uppermost in our policies and plans,” indicating that addressing these concerns is a priority of government.

What is the scope of the Commission’s market inquiry?

The Commission’s Terms of Reference (published on 18 August 2017) identify the following main objectives of the inquiry:

  • to understand the data services value chain;
  • to identify areas of market power and structural, behavioural and regulatory factors that may influence competition or pricing. Factors such as the impact of the current regulatory regime, strategic behavior by large incumbent firms, investment in and sharing of network infrastructure, and access to allocation of spectrum, are mentioned specifically;
  • to benchmark South African data services pricing against those of other countries; and
  • to establish whether data supply quality and coverage is adequate by international standards and the country’s developmental needs.

The Commission has identified two outcomes of the market inquiry, namely to make recommendations to:

  • government regarding how to increase competitiveness and inclusivity in the market; and
  • the sector regulator (ICASA) on the competitive impact of the regulatory framework and any need for amendments.

Continue reading for a simple summary of what the Competition Commission’s market inquiry into the data services sector entails – Full Article.