Category: Media

Cable Cartel may lead to battle of the titans

Posted on by andreasstargard

The South African Competition Commission (the Commission) has recently referred its findings of cartel conduct against Alvern Cables, South Ocean Electric Wire Company (SOEW), Tulisa Cables, and Aberdare Cables who are all suppliers of power cables, to the Competition Tribunal (Tribunal). The Power cables include products such as house wire, surface twin and earth wire and are generally made from, amongst other things, copper, aluminium, polyethylene, steel tape and galvanised wire. These power cables are used to distribute electricity to residential and commercial users.

The Commission found that between 2001 to at least 2010, the firms directly or indirectly fixed the selling prices of power cables to wholesalers, distributors and original equipment manufacturers. The Commission, in its referral, is requesting that the maximum penalty of 10% of the annual turnover of the companies should be imposed.

Acting Commissioner Tembinkosi Bonakele had some interesting remarks regarding the matter: “We have been working tirelessly to thwart any effort that goes to undermine South Africa’s global position that provides value to businesses. Our steadily growing economy can ill-afford rogue business practices” This from the same individual who defended the right of Government to intervene on the ill-defined “public interest” criterion in high-profile merger investigations, thus subjecting them to lengthy and costly reviews.
It is noteworthy to mention that amongst the affected customers who bought these products, were the Bidvest Group (Voltex Group), ARB Holdings Ltd; Universal Cables (Pty) Ltd, Trinity Cables CC, Powermac, Paragons and South Atlantic Cables and Electrobase. It is a small group of companies, with a great amount of resources, which could mean that civil damages might be instituted if the alleged cartel members are found guilty before the Tribunal.

Furthermore, the first class action matters based on competition law contraventions which are currently before the high courts of South Africa will be finalsised by the time the cable cartel proceedings have been finalised before the Tribunal, which means there would be a clear picture of the situation where distributors and end consumers institute damages claims simultaneously against the same parties.

The Acting Commissioner
The Acting Commissioner

Mobile Telecom and Payments sector getting boost from state in Kenya

Posted on by andreasstargard

kenya

See PDF reprint of this article (published by “e-competitions“) here.
According to a release by the Kenyan Communications Commission (CCK), the CCK is cooperating with the country’s Competition Authority (CAK) to enhance the mobile telecoms sector in Kenya.

The CCK is aiming for 90% of all Kenyans to have access to mobile communications devices within five years, thereby seeking to double the telecoms sector’s contribution to the country’s GDP to a total of 5%.  It is noteworthy that Kenya – a comparatively technologically advanced East African nation that currently already has 76% mobile penetration among its residents – is not only relying on the telecom authority to achieve these goals, but the agency is actively collaborating with the competition watchdog CAK.

An article in HumanIPO quotes the CCK director general, Francis Wangusi, as saying: “We are working with the Competition Authority to ensure that all the mobile money transfer platforms are transparent in order to promote competition.”  The official CCK press release is available here.

Other interesting statistics are the planned increase in internet penetration from the current 41.6% to 70% and that of mobile money services from 58.9% to 70% by the end of the 5-year plan.

Mobile payments have been described as “the epicenter of mobile commerce. The merger of the social, mobile, and payment industries has created incredible business growth opportunities for start-ups, social media, banks, retailers, payment networks, and other companies.”

Use of a mobile device such as a cell phone with SMS or internet capability is particularly widespread in many African countries, where brick-and-mortar banks are scarce and not widely used by the vast majority of the population, whereas mobile phones are omnipresent and relatively easily accessible (see the 76% current penetration rate, which rivals that of developed European economies).

Kenya itself is considered by many to be at the forefront of the African mobile-payments universe, with its M-Pesa mobile-currency system often touted as the most developed mobile-payment system in the world.  The Economist asked rhetorically: “Why does Kenya lead the world in mobile money?”, pointing out that roughly 25% of Kenya’s GDP flows through the mobile service, with over 17 million users in Kenya alone.  The WorldBank has commented that “Mobile payments go viral [with] M-PESA in Kenya.”  M-Pesa was originally launched in March 2007 by Vodacom/Safaricom in Kenya and is now jointly operated with other carriers offering services in Tanzania, South Africa, Afghanistan, India and other nations.

Botswana opens probe into pay-TV provider MultiChoice

Posted on by andreasstargard

botswana

According to Botswana publication Mmegi, the domestic competition authority** has opened a probe into business practices surrounding MultiChoice’s so-called “bouquets” of pay-TV programs.  (Personally, I’d call it a bundle or package.  Maybe the local euphemism authority could look into the “bouquet” moniker, as well).

The paper reports that MultiChoice has over 6 million Botswanan customers (one of whom purportedly filed the formal complaint with the competition authority) and “has maintained a stranglehold” on the pay-TV segment.  The complaint appears to focus on pricing and dominance abuses by the provider.  There is also a South African probe into MultiChoice’s alleged abuse of a dominant position, as we reported last month.

**That’s their official link, but it seems to be parked, or dead.  Ironically, the competition authority’s Facebook page (!) appears live and well.  Here’s a photo of, presumably, the staff.