Two key recommendations regarding pre-paid data bundle:

1. Vodacom and MTN must independently reach agreement with the Commission within two months on a reduction in the headline prices of all sub-500MB 30-day prepaid data bundles to reflect the same cost per MB as the 500MB 30- day bundle.

2. Vodacom and MTN must independently reach agreement with the Commission to cease ongoing partitioning and price discrimination strategies [with respect to pre-paid data bundles] that may facilitate greater exploitation of market power and anti-poor pricing.

Draw on your economic theory and review of the evidence to critically evaluate the two recommendations of the Competition Commission regarding the price of pre-paid data bundles. Are the recommendations justified in terms of economic theory and empirical evidence?

Focus only on the prices of pre-paid data bundles.

Assume that there are no differences in the quality of pre-paid data bundles offered by different mobile operators (i.e. the bundles are homogenous).

Use your economic theory on duopolies and price discrimination to explain the pricing behaviour of Vodacom and MTN. Use figures in your theoretical analysis.