• INCM uses strategy of not specifying legal bases to impose new tariffs
• INCM presents no evidence of anti-competitive tariff practices between the country's three telephone operators

The Competition Regulatory Authority (ARC) says that Mozambique's National Communications Institute (INCM) is acting irregularly within its powers to regulate the communications market in the country.

In the ARC's opinion on INCM resolution no. 01_BR/CA/INCM/2024, of February 19, the situations are demonstrated and all the arguments that lead to the conclusion that the communications regulator's procedure constitutes an irregularity and "calls into question the legality and effectiveness of the [aforementioned] resolution" that establishes the tariffs in force.

Among the findings, the ARC opinion states that the INCM was frivolous in not clarifying which of its attributions it used, in article 11 of the Regulation for Determining the Operator with a Significant Position in the Telecommunications Market, to support resolution no. 01_BR/CA/INCM/2024, of February 19.

According to the document, the INCM did not substantiate "the measures adopted as justified and proportionate to the problem identified in the market... calling into question the accuracy and factual justification for the decision taken in the Resolution".

For the ARC it seems that the INCM has assumed Tmcel, Vodacom and Movitel as Operators with a Significant Position (OPS) in accordance with the provisions of article 11 of the Regulation for the Determination of the Operator with a Significant Position in the Telecommunications Market.

In addition to the fact that the Resolution does not identify OPS, "the preliminary analysis does not lead to the conclusion that the three operators Movitel, Tmcel and Vodacom are simultaneously OPS".

The same lack of objectivity on the part of the INCM can be seen in the use of article 18 of the same Regulation to justify the application of the Resolution. Among other things, the ARC states that it was the INCM's responsibility to inform the ARC of possible signs of anti-competitive practices. This has not happened, nor has the communication or even the demonstration of evidence. The same should have happened in order to carry out "a joint study of the most appropriate measures for the promotion of effective competition, as established in the same article 18".

In its analysis of the Regulation on the Criteria and Principles for Setting Telecommunications Tariffs, the ARC states that the INCM has not proven the existence of unfair competition through the application of below-cost tariffs.

"The mere mention of the fact by the INCM is not enough, but it is up to this entity to bear the burden of proof, which was not done, in clear and flagrant violation of the principle of adopting transparent measures attached to it...".

The ARC's opinion states that there was no evidence of anti-competitive practices either in the Resolution or in the studies carried out on the basis of which it was approved.

However, if there is a possibility for the INCM to impose tariffs in a given market, these measures "should not be done in the abstract or be of general application, but only imposed on the OPS or in markets where there is only one telecommunications operator providing a public telecommunications network or a public telecommunications service".

Thus, the ARC says, the INCM's intervention was not really aimed at "discouraging behavior that could limit free competition in the market".

On the other hand, the ARC found that the directives for the implementation of the Resolution "bring new aspects, not mentioned in the Resolution, which constitutes a contradiction with regard to the matters dealt with in both instruments".

An aggravating factor, according to ARC, is the INCM's failure to make public the note and directives for the implementation of the Resolution - issued more than 40 days after the Resolution came into force - and "once again calls into question its transparency, in violation of the legal commands regarding the transparency of administrative activity and the right to information".

"Considering that the aforementioned Note and Directives were intended to ensure uniformity and reasonableness in the application of tariffs in telecommunications service packages, it was expected that these instruments would be made public and that the INCM would not establish minimum tariffs below the lower limits defined in the Resolution. If the intention was to implement lower tariffs, it is understood that the right course of action would be to revise downwards the tariffs defined in the aforementioned Resolution, by means of an instrument of equivalent legal value. Furthermore, the contents of the Note and the Directives must not contradict the provisions of the Resolution that gave rise to them, nor must they include aspects not mentioned therein, under penalty of total illegality," we read.