Stop Vodacom and MTN strong-arm tactics: Industry expert
Internet Service Providers (ISPs) have battled for better wholesale access from Telkom for years, but their focus is starting to shift to the mobile operators whose wholesale data prices are higher than retail rates.
Many ISPs have voiced their frustration in trying to build sustainable business models using the cellular operators’ wholesale products, and some disputes have even landed up in court.
In 2010 the wholesale data pricing battle between Vodacom and Gogga made headlines, and since then many other service providers have joined the call for better wholesale access from the cellular operators.
In an interview with MyBroadband BusinessTech, Neology CTO Roelf Diedericks said that better wholesale cellular access is sorely needed.
“The 3G spectrum that was given to the cellular operators for free by her majesty ICASA should be subject to some kind of unbundling, or at least regulated wholesale access,” said Diedericks.
“ICASA’s regulatory focus should shift to the behemoth cellulars such as MTN and Vodacom who have pillaged the public for years, in the same way Telkom has done.”
“You can ask any ECNS holder who has tried to arrange peering or interconnection with MTN or Vodacom to comment on how “fair” their practices are. You will hear the same recurring tale of strong-arm tactics and well-oiled lawyers perpetuating the same practices that Telkom perfected a decade ago.”
MWEB CEO Rudi Jansen also feels that wireless networks should be opened up for wholesale.
“Currently the wholesale wireless pricing is higher than the retail pricing. If proper wholesale principles are introduced more ISPs will enter the wireless market and one will see innovation and improved pricing on the networks,” said Jansen.
Vodacom responds
Chris Ross
Chris Ross, managing executive for commercial development at Vodacom, explains that they have one product aimed at corporate customers and ISPs.
“We have a ‘large volume aggregated product’ designed for corporate customers to share amongst their staff, which ISP Operators have chosen to on-sell. This is volume-based and is priced according to thresholds reached and does not resemble the retail bundle offerings that Vodacom provides,” said Ross.
“Prices are charged per MB and reduce with more data used – as opposed to the retail offering which offers ‘use it or lose it’ monthly bundles with different in-bundle and out of bundle rates. Data prices are constantly reducing and this applies across our product range to ensure that Vodacom remains competitively priced.”
MTN responds
When asked for comment Mike Fairon, GM Product Innovation and development at MTN South Africa, said that the “statements that MTN is required to respond to are vague and do not offer any kind of facts or explanation as to how those conclusions are arrived at”.
“MTN believes that there is most probably a fundamental confusion between retail and wholesale products – in essence a comparison between apples and pears that leads to an incorrect conclusion,” said Fairon.
“MTN prides itself in the quality of its data offerings and competitive pricing of our data products. As an example, MTN data products provide for flexibility by allowing the loading of 1 additional bundle either in a once off or recurring basis to assist customers if they need to exceed their usual usage.”
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