Competition authority condemns increase in telecommunication tariffs
Mozambique’s Competition Regulatory Authority (ARC) has strongly criticized the National Communications Institute (INCM) for its ill-fated attempt to hike telecom tariffs.
Although the INCM is the regulatory body for telecommunications, it ought to have consulted with the ARC before demanding, in February, that mobile phone companies raise their prices.
The new tariffs caused protests among consumers, who dismissed as untrue the initial INCM claim that prices had not risen. Such was the outcry that the government stepped in and told the INCM to cancel the new tariffs and return to the old ones.
A 20 page ARC document made public on Tuesday dismissed the INCM claims that it had intervened to end a situation of unfair competition which threatened to bring the telecommunications market to collapse.
The ARC said the INCM had not shown that there was any unfair competition. Furthermore, if it had indeed become aware of anti-competitive practices, the INCM should immediately have informed the ARC. The INCM and ARC could then have coordinated the actions to be taken “not only to punish the offenders, but also to promote pro-competition or corrective measures”.
But the INCM had acted unilaterally “and did not show the existence of unfair competition by charging prices below cost”. This was a clear violation of the INCM’s duty to act transparently
The INCM should also, the ARC added, have limited its measures to whichever of the operators was supposedly distorting the market. Instead, the INCM had suddenly imposed an increase in mobile phone tariffs across the board.
By doing so, the INCM is limiting the telecommunication rights of citizens and this decision puts Mozambique among the countries with the highest communications prices, the ARC warned.
Unlike the INCM, or any of the mobile phone operators, the ARC bothered to work out how much extra the average consumer would have to pay with the new tariffs. It found that the average monthly cost per subscriber of mobile phone services (including use of the Internet) would rise from 256.92 meticais to 8,011.52 meticais – a staggering increase of 3,018 per cent.
A monthly telecommunications bill of 8,011.52 meticais is also 162 per cent of the lowest of the monthly minimum wages in force in Mozambique. Prior to the INCM February dispatch, the figure was only 5.36 per cent of the lowest minimum wage.
This, the ARC noted, threatened to make Mozambique one of the most expensive countries in the world for telecommunication services.
The ARC concluded that it is not enough for the INCM merely to suspend its dispatch increase – instead the dispatch should be revoked.
Consumers are now protesting that, despite the government intervention and the INCM promise to suspend its polemical dispatch, prices are far from returning to the pre-February levels. In particular, telecommunications operators have abolished those packages which used to allow for unlimited access to the Internet.
Source: AIM
