The impact of competition law on pricing of telecommunication services

Abstract

The South African telecommunications industry is dominated by monopolies that were previously very under regulated in terms of incorporating competition law. The state-owned conglomerates known as Telkom, MTN and Vodacom were the dominant monopolies in the market. This was due to regulations that provided them with the ability to be the only companies in the telecommunications industry providing particular services such as fixed line telephone services, thereby, providing them with the market power and market share to control and determine the prices within the telecommunications industry. Competition law dictates that if a company is dominant it is not outright regarded as a problem. It becomes an issue when the dominance is abused to the detriment of the consumer. Excessive pricing is seen as detrimental to all consumers and is a prohibited action within any industry. South African telecommunications law has become regulated by two agents, first of them being the Competition Commission and the second The Independent Communications Authority of South Africa (ICASA). These two bodies share their jurisdiction in insuring competition remains within the telecommunications industry. However, abroad they follow different measures and regulations to ensure the competition remains within the telecommunications industry. This dissertation will look at the past and current competition law integration within the South African telecommunications market, as well as the international telecommunications industry. An overall look at by ensuring there is a specific knowledgeable agent to regulate the competition in the telecommunications market and less general judiciary bodies regulating this industry that it would be the only way that competition law will be its most powerful in ensuring pricing is never to the detriment of all consumers.