The Executive Director of the Competition Commission of Mauritius (CCM) has opened an investigation on an alleged monopoly situation subject to review under section 46 of the Competition Act 2007, pertaining to the mobile telephony sector.
The Executive Director is concerned that two mobile telephony operators, which may be in a monopoly situation, could be engaging in both exclusionary and exploitative conduct in relation to their pricing policy for voice calling services.
At this early stage of the investigation, the underlying concern is that two mobile telephony operators could be discriminating between tariffs for voice calls placed within the same network (referred to as ‘on network calls’ or ‘on-net calls’) and calls placed to other networks (referred to as ‘off network calls’ or ‘off-net calls’). This price discrimination could be preventing, restricting or distorting competition in the local mobile telephony sector, which ultimately could deter or slow investment, innovation and growth in the sector. Additionally, the price discrimination between on-net and off-net calls could mean that subscribers are paying relatively more for off-net voice calls for reasons which may potentially be unrelated to cost differentials.
No conclusion has been reached at this stage and a firm conclusion can only be drawn after completion of the investigation.
At this stage, the Executive Director has concluded that he has reasonable grounds to believe that such conduct on the part of both mobile operators may constitute restrictive business practices. Upon completion of the investigation, the Executive Director will report his findings to the Commission. If the Commission concludes that the object or effect of the conduct is to restrict, prevent or distort competition in any market, or in any way constitutes the exploitation of a monopoly situation, it may take necessary steps to remedy the situation. Alternatively, the investigation might find no infringement of the Act, in which case the investigation would be closed without further action. No financial penalties can be levied for a breach of the monopoly provisions of the Act; the focus instead is on taking measures to restore competition.
Deshmuk Kowlessur, the Executive Director of the CCM, said:
“The mobile telephony sector is essential for providing an effective and quick means of communication to consumers and businesses alike. With a mobile cellular subscription rate of 130.9% for the year 2014, the mobile telephony sector represents a substantial part of the ICT economy in Mauritius. Mobile phones allow businesses to streamline their business processes and increase productivity. Healthy competition among operators thus ensures investment, innovation and growth within the sector for greater benefit for the economy. The CCM has been set up to safeguard competitive forces in all sectors of the economy. With this investigation launched into the conduct adopted by two mobile telephony operators, the CCM aims to assess whether there has been any breach of the provisions of the Competition Act 2007. If any breach is found following the completion of the investigation, recommendations aiming to maintain a fair and competitive market in the mobile telephony sector for the benefit of consumers, businesses and the economy at large, will be put to Commissioners for determination”.