Icasa banks on new call termination rates

2014-09-29 17:50

The Independent Communications Authority of South Africa (Icasa) has not moved much from the original mobile call termination rates plan that caused an uproar in the telecommunications industry.

Icasa today announced new call termination rates which it hopes will trickle down to consumers.

The termination rates will be kept at 20c for the next twelve months, dropped to 16 cents on October 1 2015 and finally to 13 cents in October 2016.

“We believe that this is a significant step towards making voice services more accessible to all South Africans. We must caution consumers that retail rates do not in all instances come down by the drop in the termination rate,” said Icasa councillor and chairperson of the mobile termination rates committee Nomvuyiso Batyi.

“The extent to which retail rates drop is operator dependent. A drop in the retail rates may not necessarily happen immediately either. We did, however, see an almost drop in retail rates by some operators after the implementation of the previous glide path.”

Previously, Icasa had cut the termination rates by half to 20c, starting in April and the rate cut was going to follow a glide path to 10c by 2016. What was particularly irksome for Vodacom and MTN was the asymmetry given to smaller players Cell C and Telkom Mobile. This means that MTN and Vodacom pay more when Cell C or Telkom Mobile calls are terminated on their networks.

Vodacom and MTN took the regulator to court on the basis that Icasa’s process to arrive at those numbers was not scientific.

The court ordered the regulator to go back to the drawing board but also ruled that the new rates could be instituted for six months starting on April 1 2014.

Icasa Chairperson Stephen Mncube said broadband had become increasingly important in the country ... and regulating the cost of communication (was necessary).

“We need broadband for education so that children can access the tools to learn ... it is needed in hospitals and clinics to provide better healthcare,” said Mncube.

Councillor Katharina Pillay, who was also on the mobile termination rates committee, said they hoped that the movement to cheaper telecommunication prices would happen quickly.

“In previous processes consumers thought prices would go down but prices don’t drop proportionally because of the cost structures of the operators,” she said.

Vodacom spokesperson Richard Boorman said: “This process has been constructive and is a good example of how the industry can work with the regulator to get to a scientifically-based result. We’re going to review the new rates and will be in a better position to provide comment once that has been completed. We have some concerns about the asymmetry granted to certain companies and the potential impact that this could have on our business.”

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