'We've seen profit margins of 30% in South Africa'

The Competition Commission of South Africa has slammed the country's most successful cellphone companies for being 'anti-poor'.

Its provisional report on the cost of mobile data found that local prices compare poorly with other Brics and SADC countries, with MTN and Vodacom charging higher prices at home than they do in markets outside South Africa.

Read: Vodacom, MTN charge more for data at home in South Africa than anywhere else

On the Breakfast Show with Kieno Kammies, Commissioner Thembinkosi Bonakele explains how the research was conducted.

We started by asking for information from stakeholders, lots of civil society groups, we asked for information from operators themselves, we used some of the data from Icasa and then we collated some of the data ourselves from other global sources. public hearings on question

Thembinkosi Bonakele, Commissioner - Competition Commission

Bonakele says this was followed by public hearings focused on the question of whether the price of data in South Africa is high.

The answer was a resounding yes, prices are high in South Africa.

Thembinkosi Bonakele, Commissioner - Competition Commission

Bonakele says the Commission was particularly shocked by the fact that these high prices hit the poor the hardest, as they buy smaller bundles of data.

He outlined the dominance of Vodacom and MTN and their high profit margins in the local market.

The likes of Telkom and Cell C have to scramble for customers. partly because their network tends to be poor... This is the outcome of a market that has failed.

Thembinkosi Bonakele, Commissioner - Competition Commission

It's very clear that there are exorbitant prices here and it's leading to very good profits for the incumbents.

Thembinkosi Bonakele, Commissioner - Competition Commission

We've seen profit margins in the order of 30% in South Africa. When you look at comparable countries you see profitability margins of about 12%.

Thembinkosi Bonakele, Commissioner - Competition Commission

Bonakele goes on to evaluate the arguments the big cellphone companies put forward for their high prices in South Africa, like better quality infrastructure and service.

Take a listen:


This article first appeared on CapeTalk : 'We've seen profit margins of 30% in South Africa'


Recommended

by NEWSROOM AI
Read More
'Council for Medical Schemes allowing bully-boy tactics'

'Council for Medical Schemes allowing bully-boy tactics'

Dr Fundile Nyathi unpacks the inquiry into allegations of racial profiling of doctors by medical aid schemes.

Is it time for a shake-up in South African politics?

Is it time for a shake-up in South African politics?

Melanie Verwoerd says the country needs inspirational leaders after voters sent a message to the ANC not to take them for granted.

Peppermint Crisp is here to stay

Peppermint Crisp is here to stay

Nestlé's Ayanda Mackay reassures consumers that a twitter rumour about the choc's discontinuation was just a misunderstanding.

Popular articles
'Drought is so bad that farmers are taking own lives'

'Drought is so bad that farmers are taking own lives'

South African Water Warriors co-convenor Isabel Coetzee says the country cannot sit back and lose farmers because of the crises.

[WATCH] Gay teen fights back against school bully as teachers do nothing

[WATCH] Gay teen fights back against school bully as teachers do nothing

Khabazela shares tweets and Facebook posts that have gone viral.

Meet the women who ensured that the Boks were in top form to bring home the cup

Meet the women who ensured that the Boks were in top form to bring home the cup

The all-female team of sports physiotherapists played a key role in the management team backing the Boks during the World Cup.

Caller defends Sho Madjozi's two-channels statement

Caller defends Sho Madjozi's two-channels statement

Eusebius McKaiser and callers debate issues from the Sho Madjozi to the Springboks.

BEE has not worked, says Capitec CEO

BEE has not worked, says Capitec CEO

Capitec CEO Gerrie Fourie explains the challenges the bank, named Top 100 Company of the Year, faces.

'Aarto Act could be used by Sanral to enforce e-toll compliance'

'Aarto Act could be used by Sanral to enforce e-toll compliance'

Justice Project SA chair Howard Dembovsky says the act presumes a motorist to be guilty until he or she proves they are innocent.

[VIDEO] Family saved from being hit by speeding SUV goes viral

[VIDEO] Family saved from being hit by speeding SUV goes viral

Khabazela shares tweets and Facebook posts that have gone viral.

[WATCH] Khanyi Mbau's message for iPhone charger cable thieves goes viral

[WATCH] Khanyi Mbau's message for iPhone charger cable thieves goes viral

Khabazela shares tweets and Facebook posts that have gone viral.

Bryan Habana opens up about money, and now having to buy his own clothes

Bryan Habana opens up about money, and now having to buy his own clothes

Bruce Whitfield interviews the legendary Springbok about his attitude toward money (hopes and fears, successes and failures, etc.)