MTN, Vodacom 'vindicated' by ruling on termination rates

2014-03-31 19:40

Proposals to lower the amount cellphone companies pay to connect to other carriers’ networks, while “invalid and unlawful”, will remain in place for six months, a judge has ruled today.

Icasa said in January that so-called termination rates would be halved to 20 cents this year, with further cuts in 2015 and 2016.

MTN and Vodacom, the country’s two biggest operators, took legal action against the regulator over how it reached its conclusions, which are designed to help smaller companies.

The ruling by Judge Haseena Mayat at the South Gauteng High Court in Johannesburg today means that as of midnight tonight “the cost to terminate a call on a mobile network will be reduced to 20 cents and they will remain enforced for a period of six months,” Pieter Grootes, general manager for markets and competition at Icasa, told reporters.

“During this period Icasa will be conducting a further review in terms of the future of termination rates in South Africa.”

“It appears that our position has been vindicated but we’ll be studying the judgment and will respond in more detail later,” Richard Boorman, a spokesperson for Vodacom, said in an interview.

MTN has been “vindicated in its decision” to take the matter to court, Zunaid Bulbulia, chief executive officer for South Africa, said in a statement.

Cell C said while the ruling was a “step in the right direction” the continued uncertainty would frustrate the company’s planning beyond October.

Closely held Cell C’s ability to repay debt could be affected if regulators fail to cut termination rates, according to a court document dated March 11.

Telkom welcomed the ruling, according to a statement.

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