MTN, Vodacom ordered to slash data prices; Worse than Eskom: SA water crisis looms; manufacturing slumps

By Jackie Cameron

  • President Cyril Ramaphosa has warned that South Africa faces a grave water crisis. In his weekly letter to citizens, he says: “Unless we take drastic measures to conserve water sources and promote efficient use, water insecurity will become the biggest developmental and economic challenge facing this country. Our current energy challenges will seem small by comparison. Ramaphosa says that, with an average annual rainfall of 500mm compared to a global average of 860mm, we are the world’s 30th driest country. A decade-long drought has put immense pressure on our water systems and has had a devastating impact on agriculture and communities, especially in the Eastern Cape, Northern Cape, Western Cape, Free State and Mpumalanga. Measures municipalities are taking to avert a crisis, include upgrading water treatment works and fixing pipes. Meanwhile mismanagement of water resources and wide-scale tender corruption in the water provision sector are being tackled. Just a week ago, the Special Investigating Unit raided Lepelle Northern Water in connection with alleged corruption at the Giyani Water Project. The amount allegedly involved – R2bn – is staggering, but unfortunately symptomatic of wide scale tender corruption in these mega projects. This is putting the entire nation’s water security at risk, and the ongoing SIU probes into irregularities in these projects will continue, he promised.
  • South Africa’s two biggest mobile-phone companies have been ordered to step up efforts to lower data prices within the next two months or face prosecution by the country’s antitrust regulator, reports Bloomberg. Vodacom and MTN have the potential to reduce tariffs by 30% to 50%, Tembinkosi Bonakele, the head of the country’s Competition Commission, said in Pretoria on Monday.Changes should be “substantial and immediate,” he reportedly said following the publication of a report on the industry. Shares of the two Johannesburg-based carriers slumped on the findings. Vodacom, majority owned by the UK’s Vodafone, fell as much as 7.9%, the most since January. MTN declined the most since October, 2018, says Bloomberg. Smaller South African mobile operators have long appealed to regulators to curb the dominance of the top two carriers, while the high cost of data has been the subject of street and social media protests using the hashtag #DataMustFall. For their part, Vodacom and MTN have both said pressure to cut fees is hurting their local businesses, says the news agency. Prosecutions will mainly take place under the Competition Commission’s abuse of dominance provisions, Bonakele said.
  • Sentiment in South Africa’s manufacturing industry slipped in November, signalling contraction in the industry for a fourth straight month, reports Reuters. Absa Group Ltd.’s Purchasing Managers’ Index, compiled by the Bureau for Economic Research, fell to 47.7 from 48.1 in October, the Johannesburg-based lender said in an emailed statement on Monday.
  • Offshore investors sold a net R9.84bn ($669m) of South African stocks last week and R3.46bn of bonds, data from the Johannesburg Stock Exchange showed on Monday, says Reuters.