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Vodacom, MTN rates under scrutiny

Cape Town - Lobby group Right2Know  said that mobile network operators Vodacom [JSE:VOD] and MTN [JSE:MTN] are guilty of crippling the public's right to communicate, reported Business Day.

The lobby group launched a campaign to call for free basic and affordable telecommunications. It marched to MTN and Vodacom offices in Cape Town on Wednesday and to the Independent Communications Authority of South Africa (Icasa).

Mark Weinberg, national co-ordinator for Right2Know, feels strongly about reducing the cost of communication and he believes that their campaign will have a positive outcome. 

"History is on our side ... around the world the cost to communicate has dropped dramatically and we think we can make a proper contribution (towards reducing the cost to communicate)," Weinberg was quoted in Business Day.

The cost to communicate in South Africa is among the highest in the world. The country ranked 117th out of 140 countries in terms of mobile tariffs.

Weinberg said that the group targeted Vodacom and MTN as they dominate the industry, controlling nearly 80% of the market.

Virgin Mobile South Africa CEO Jonathan Marchbank last week accused Vodacom and MTN of unregulated and anticompetitive behaviour. He said the two firms are making it tough for smaller players to enter the market.

Flat rates among SA’s mobile operators will promote sustainable competition, Cell C’s CEO Alan Knott-Craig told ITWeb last week.

The Independent Communications Authority of South Africa (Icasa) is also moving to extensively review the telecommunications industry. 

It announced in June the launch of the Cost to Communicate programme and comes at a time when consumers are a lot more sensitive to pricing.

eNCA reported that Vodacom dismissed the claims of high costs.  “I don’t think any company would want to discuss their costs,” Richard Boorman said.

The broadcaster reported that MTN said it operates in a regulated market. 

Spokesperson Robert Madzonga said "MTN adheres to the highest ethical standards and governance necessary to maintain business continuity and sustainability.”

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