Commission: Icasa should control MTR negotiations

2009-10-14 12:20

THE Competition Commission today called for the Independent

Communications Authority of SA (Icasa) to play a greater regulatory role in

determining cellphone interconnection rates.

Icasa should also ensure that these rates were set on a defensible

basis, commissioner Shan Ramburuth told the Parliament’s communications


The committee is currently holding public hearings on what it says

is the excessive and exorbitant costs of mobile termination rates (MTR) in the

industry. The MTR is the fee a network charges another for terminating or

completing calls on its network.

“We shouldn’t be guessing these figures... you must also be able to

justify how you arrived at a particular figure,” Ramburuth said.

Any figure arrived at arbitrarily might be subject to


Icasa had costing information available, in its code of

account/cost allocation manual (Coa/Cam) study, which would allow it to arrive

at a defensible interim figure.

This should allow for a substantial but reasonable once-off

reduction on the basis of the costing methodology applied in the Coa/Cam.

The commission also supported further reductions over the next

three years, but this should also be done on a defensible basis, Ramburuth


A question that had arisen for Icasa, in determining an interim

rate, was whether such rates should be bilaterally or multilaterally negotiated

by the incumbents.

If the price setting process was led and enforced by Icasa,

competition law concerns arising from either bilateral or multilateral

discussions would fall away.

However, competition problems might arise in cases where private

firms engaged in multilateral discussions independent of the regulatory


Therefore, the commission favoured a greater regulatory role for

Icasa in determining call termination rates, and that Icasa ensure that these

rates were set on a defensible basis, Ramburuth said.

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