MTN is greedy, says Cell C

2014-02-17 08:50
Cell C acting CEO Jose Dos Santos says that mobile operators should welcome MTR reductions. (Duncan Alfreds, News24)

Cell C acting CEO Jose Dos Santos says that mobile operators should welcome MTR reductions. (Duncan Alfreds, News24)

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

Cape Town - The decision by mobile operator MTN to take legal action on the regulator's announcement of Mobile Termination Rates (MTRs) is a poor reflection on the industry, Cell C has said.

Icasa, or the Independent Communications Authority of South Africa announced recently that MTRs in SA would be reduced to allow for more competition in the country.

Specifically, MTRs which is the rate that operators charge each other, would be reduced for the larger operators - Vodacom and MTN - while allowing smaller players like Telkom Mobile and Cell C to be more aggressive on pricing.

Icasa said the costs would be cut to 20c from 40c from 1 March.

The costs will be further cut to 10c by March 2016, while the costs to fixed lines will also fall over the next three years, the regulator said.

Unhappiness

MTN expressed its unhappiness with the new regulations

"Suffice to say that the Call Termination rates announced by Icasa represents a substantial departure from the 2010 Call Termination Regulations which set an important regulatory precedent in relation to matters such as cost-orientation of the rate-setting, a managed glide path, and declining asymmetries," the operator said.

The company has indicated that it will sue Icasa over the issue which gives Cell C and Telkom Mobile more leverage to reduce mobile pricing in SA.

"It's a very sad day for this country. MTRs have been around since we started... For the first time government has really gone out there with the regulator and said: 'Let's create a framework that allows fair competition,'" Cell C acting CEO Jose Dos Santos told News24 about the impending lawsuit.



He said that the reduction in MTRs would facilitate more competition, allowing prices to eventually come down for consumers.

"Competition brings prices down, creates more affordability; creates innovation. MTRs have allowed the third and fourth incumbent to create a level playing field to create more competition, thereby bringing prices down."

An analyst said that the court action would forever change the nature of the relationship between the government and mobile operators in SA.

Consumers 'ripped off'

"Termination rates, despite their emotive connotations, remain one element of the pricing structure that makes up call charges for the networks. While termination rates are already a distortion in a fair and competitive environment, the introduction of asymmetry needs careful consideration to prevent the asymmetric rate becoming another inhibitive distortion to the pricing structure," Steven Ambrose, CEO of Strategy Worx told News24.

He said that consumers in SA are tired of being "ripped off" and the latest courtroom drama would not endear the operators to their customers.

"Consumers will maintain that they have been ripped off for far too long in this environment, and the public outcry in reaction to MTN’s court action will be largely negative for the networks," Ambrose said.

However, he warned that in the short term, reductions in MTRs would result in significant savings for mobile consumers.

"Having said that, Strategy Worx has long maintained that this latest round of MTR cuts will not result in massive benefits for the consumer in the short term because they won't immediately change the competitive landscape between the networks," he added.

Dos Santos said that Cell C was driven to reduce pricing and cited the 15c per megabyte data rates as well the 2012 introduction of a 99c flat call rate on the network.

He said that mobile operators should be focused on the long term development of the country rather than short term profit.

"When I say it's a sad day for South Africa, you have a corporate citizen who actually puts their greed and profitability first before developing the economy of the country."

Watch our News24 video interview with Cell C acting CEO Jose Dos Santos on how the MTR fight will affect your pocket.




- Follow Duncan on Twitter

Read more on:    mtn  |  cell c  |  icasa  |  mobile
NEXT ON NEWS24X

Read News24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
58 comments
Add your comment
Comment 0 characters remaining
 

Inside News24

 
 

Land reform process lawful - Zuma

The land reform process is being done according to the law and the Constitution, says President Jacob Zuma.

 
 

Latest elections multimedia

11 Julius Malema quotes you'll never forget
DA won't get 30% - Zille
The EFF's ad was banned, see why
Why Jack Parow wants you to vote on 7 May
 
Traffic
Lottery
 
  • Tuesday Century City - 05:58 AM
    Road name: Ratanga Road Southbound
    ROADWORKS - lane closure between Ocean Spirit Avenue and Century Boulevard (until mid April)
  • Tuesday Mitchells Plain - 05:58 AM
    Road name: Spine Road
    ROAD CLOSED between Weltevreden Drive and Seafarer Drive due to roadworks (until mid April)
 
More traffic reports...
 

Jobs in Cape Town [change area]

Property [change area]

Travel - Look, Book, Go!

Escape winter, head to Mauritius

Escape winter by spending 7 nights in Mauritius' tropical bliss from R13 215 per person sharing. Includes return flights, airport transfers and accommodation. Book now!

Kalahari.com - shop online today

Get 50% off selected books!

Buy 2 books and get 50% off the second book. Offer valid while stocks last. Shop now!

Mother’s Day special offers!

Spoil mom with these awesome specials that will warm her heart. Shop now!

Twisp – the smoking alternative

Buy any 2 refills for R250 and save R149. Offer valid while stocks last. Shop now!

25% off bestselling books!

The Real Meal Revolution by Tim Noakes, Jeffrey Archer’s Be Careful What You Wish for, Man’s Search for Meaning by Victor E. Frank and many more titles. Shop now!

Mother’s Day specials on appliances

Browse our range of Mother’s Day appliances to spoil and pamper mom. Offer valid while stocks last. Shop now!

OLX Free Classifieds [change area]

Samsung Galaxy s4

Mobile, Cell Phones in South Africa, Western Cape, Cape Town. Date October 24

Best bargain in big bay

Real Estate, Houses - Apartments for Sale in South Africa, Western Cape, Cape Town. Date October 25

VW Golf 6, 1.6 Trendline (Excellent condition)

Vehicles, Cars in South Africa, Western Cape, Cape Town. Date October 25

BlackBerry Curve 3G 9300

Keep it together Text. Email. Social. With all the different ways to...

From R1399.00

I'm shopping for:

Horoscopes
Aquarius
Aquarius

You may be more sensitive today and can be influenced easily by the energies around you. Try not to be swayed too much by the...read more

There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.








Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.