JOHANNESBURG, October 4 (ANA) – The Competition Commission said on Wednesday that it had initiated an investigation against Vodacom Group for abuse of dominance after the company secured an exclusive contract to be the sole provider of mobile telecommunication services to the South African government.
In March 2016, National Treasury issued a four-year tender for the supply and delivery of mobile communication services to national and provincial government departments for the period September 2016 to August 2020.
Vodacom, the largest mobile service provider in South Africa, was the preferred supplier after the other bidders were eliminated at different phases of the bidding process.
Before Vodacom entered into the exclusive agreement with National Treasury, all government departments could purchase mobile telecommunication services from any mobile network operator.
The commission said it had information that there were 20 government departments which would be tied into the new Vodacom contract. Other departments, including state owned entities and municipalities, will be incentivised to adopt the new contract.
The commission said it has reasonable grounds to suspect that the exclusive contract may constitute an exclusionary abuse of dominance by Vodacom in contravention of the Competition Act.
It was of the view that the contract would further entrench Vodacom’s dominant position in the relevant market; raise barriers to entry and expansion in the relevant market; distort competition in the market; and result in a loss of market share for other network operators.
– African News Agency (ANA)
