Vodacom
Advisory Services
The Situation
In order to regulate retail prices for mobile services in South Africa, the regulator ICASA was proposing to use international benchmarking to determine whether the current retail prices were fair. However, the selection of countries chosen by the regulator included a number of countries with very different demographics to those of South Africa, and no reasoning for this selection was given.
NERA's Role
NERA provided Vodacom in South Africa with an independent report detailing a robust and detailed methodology for selecting appropriate countries against which the South African regulator could benchmark Vodacom's regulatory submissions.
NERA's report outlined a two-stage process, which ranked countries by their closeness to South Africa in terms of a number of geographical, communications, and mobile industry variables. In addition, the report set out how differences between countries may lead to differences in costs or prices, which must be taken account of for benchmarking purposes.
The Result
Vodacom used NERA's report to inform their discussions with the South African regulator, and to demonstrate how the regulator could choose a more robust set of countries for benchmarking purposes.
