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Monday, February 17, 2003

Tereza has sent in a fascinating story from AllAfrica.Com which suggests that efforts to increase competition in Mozambique's mobile phone sector may in fact lead to a doubling of the basic unit price that mobile phone users are charged.

Mozambique's Sunday paper "Domingo" has reported that the South African company Vodacom, which won the tender for the second mobile phone licence in Mozambique, is refusing to operate in Mozambique unless its competitors are forced to put up their prices...

In late August, deputy executive director of Vodacom, Andrew Mthembu, described M-Cel's rates as "ridiculously low", and stated that they should be doubled.

This raises the obvious questions of why Vodacom bid for the 15 year licence if they are so unlikely to be able compete within existing pricing structures and whether "competition" is always such a good thing for the consumer?