Vodacom probed for abuse of dominance in securing Treasury tender

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Vodacom probed for abuse of dominance in securing Treasury tender

5 October 2017 8:12 AM

The Competition Commission is investigating South Africa's mobile network operator, Vodacom Group, for abuse of dominance, after the company secured an exclusive contract with National Treasury to be the sole provider of mobile telecommunication services to government.

Vodacom says Treasury issued a tender and they followed every process in securing it.

Thembinkosi Bonakele Commissioner at the Competition Commission says the commission is not questioning the process that was followed by Treasury in putting out the tender, but the outcome of this tender, making sure it is not anti-competitive.

We not questioning whether Treasury has the power to do this or not because clearly it does.
— Thembinkosi Bonakele, Commissioner of the Competition Commission

The Competition Act prescribes certain things that a dominant firm may not do, in this case Vodacom. One of the things it may not do is to exclude other participants from entering or expanding in a market and we are suspecting that is what this contract will effectively do.
— Thembinkosi Bonakele, Commissioner of the Competition Commission

What we are looking at here is the consolidation of the largest buyer in the market taking business to the largest guy in the market, taking all the business and raising barriers to entry to all others.
— Thembinkosi Bonakele, Commissioner of the Competition Commission

Bonakele says they have engaged with both Vodacom and Treasury respectively. They will be meeting again on Thursday because Vodacom has indicated the need to hear Treasury's response in the matter.

To hear the rest of the interview, listen below:

This article first appeared on CapeTalk : Vodacom probed for abuse of dominance in securing Treasury tender

Written by: Lengwadishang Ramphele