'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
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
[WATCH] Tour de France rider smashes into spectator's cellphone

[WATCH] Tour de France rider smashes into spectator's cellphone

Cycling journalist Mikkel Conde tweeted the clip warning spectators to stop leaning over the barriers with their phones.

You made a huge mistake downloading FaceApp if your privacy is important to you

You made a huge mistake downloading FaceApp if your privacy is important to you

Washington Post technology columnist Geoffrey A. Fowler did a forensic analysis of the Russia-based app. Check it out.

'I would take the Prosus shares (25%) as well as Naspers (75%) shares'

'I would take the Prosus shares (25%) as well as Naspers (75%) shares'

Should Naspers shareholders take up Prosus shares? Bruce Whitfield interviews personal finance advisor Warren Ingram.

Woolworths (at R40 a cup!) makes the best takeaway hot chocolate in South Africa

Woolworths (at R40 a cup!) makes the best takeaway hot chocolate in South Africa

Seattle Coffee Company has the worst takeaway hot chocolate in the country, according to, uhm, "research" by Chaos Theory.

Old Mutual and Trevor Manuel are victimising Peter Moyo - Advocate Dali Mpofu

Old Mutual and Trevor Manuel are victimising Peter Moyo - Advocate Dali Mpofu

The Money Show's Bruce Whitfield interviews TJ Strydom, a journalist at Business Day and author of Christo Wiese’s biography.

How to buy a new car even if you don’t really have enough money for it

How to buy a new car even if you don’t really have enough money for it

South Africans are increasingly buying cars they can’t afford using balloon payments, says consumer journalist Wendy Knowler.

[2018] Jesse Clegg (son of Johnny) opens up about money and growing up on tour

[2018] Jesse Clegg (son of Johnny) opens up about money and growing up on tour

[From the archives] Jesse Clegg talks about his famous father and attitude to money (hopes and fears, successes and failures...).