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South Africa: Competition watchdog probes Vodacom for market abuse

By  |  October 4, 2017
South Africa: Competition watchdog probes Vodacom for market abuse

The Competition Commission of South Africa has launched an investigation into Vodacom. The probe was in connection with the mobile giant’s alleged abuse of dominance, after it secured an exclusive contract with National Treasury, to be the sole provider of mobile telecommunication services to government, from September last year to August 2020.

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    “Before Vodacom entered into the exclusive four-year agreement with National Treasury, all government departments could purchase mobile telecommunication services from any mobile network operator,” the commission said in a statement on Wednesday, October 3.

    “The commission has information that there are 20 government departments which will be subjected to the new Vodacom contract. Other departments, including state owned entities and municipalities, will be incentivised to adopt the new contract”.

    The commission said Vodacom might have contravened the Competition Act and believes the company having been awarded the contract would further entrench its dominant position in the market, raise barriers to entry and expansion in the market, distort competition in the market and result in a loss of market share for other network operators.

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