Bandwidth holds key to lack of telecoms competition

Genesis was appointed by the World Bank to conduct an assessment of the effects of the introduction of South Africa’s Competition Act in 1998, as well as of its failure to curb the anti-competitive conduct dominating the telecommunications sector.

This followed various findings of anti-competitive behaviour in the South African telecommunications sector during the 2000s.

The project team’s analysis and subsequent report focused on competitive conditions in the international bandwidth market, in particular the pricing of international submarine cable bandwidth. This example was selected to illustrate the failure of both the sector regulator and the competition authorities to successfully intervene in order to prevent anti-competitive behaviour in the market.

The team identified the lack of concurrent jurisdiction between the Independent Communications Authority of South Africa (ICASA) and the Competition Commission as a key stumbling block of poor regulatory outcomes in the sector.

The methodology and assumptions used by the French telecoms regulator (Autorité de Régulation des Telecommunications) to set bandwidth prices was used in order to estimate margins on similar bandwidth in South Africa. This demonstrated that a regulator can overcome issues surrounding inadequate data availability, even without the cooperation of operators with respect to their regulatory accounts.