“The two dominant incumbents discount their effective on-net prices substantially while charging a premium for their customers to call off-net. This amounts to discriminatory pricing and is without doubt anti-competitive when adopted by dominant operators,” said Cell C CEO Alan Knott-Craig in a press statement.
The complaint, which was announced on Wednesday, relates to how the more dominant mobile network operators discriminate between their on-net and off-net effective prices, which is reported to have a dramatic and direct impact on smaller operators’ ability to acquire new customers.
Customers that call off-net are being penalised often without them realising it. With number portability, customers don’t always know if they are calling on- or off-net anymore, so they don’t actually know what rate they are paying,” said Knott-Craig.
Some regulators are also opposed to differential on-net and off-net pricing, and in some telecommunications markets around the world, mobile network operators have been heavily penalised for this type of discriminatory pricing.
The discriminatory pricing also locks in customers to a particular network and makes it difficult to switch to another.
The announcement comes after the Independent Communications Authority of South Africa (ICASA) announced proposed that interconnection rates be halved to 20 cents per minute by March next year.
Knott-Craig welcomed the announcement, explaining that it would benefit smaller players in the country’s telecommunications industry.
Cell C is one of two mobile network operators with a smaller market share in the country than Vodacom and MTN.
“The only way you’re ever going to get prices down is through competitors trying to get market share, because the only way they can get market share is through price,” said Knott-Craig.