MTN and Vodacom have now both hit back at telecoms regulator Icasa after their announcement of the new asymmetrical call termination rates.
The termination rates are the fees which operators charge each other to carry calls between their networks.
The new system which Icasa is set to implement allows for asymmetric termination rates between different suppliers. Mobile termination rates, which are currently 40 cents, will now be 44 cents for bigger companies when carrying calls to smaller companies while smaller operators will pay only 20 cents to their bigger rivals
Icasa says that the aim of this model is to help smaller mobile operators to grow and increase competition in the market.
MTN and Vodacom have both logged applications at the High Court in Johannesburg for an interim order to stop the cuts in mobile call termination rates and want a full review of the process used to determine the new rates.
In a statement which was released to the press, Zunaid Bulbulia, CEO of MTN said, “MTN’s concern is that there is no cost basis for the new mobile termination rates and, more concerning, MTN has not been provided with any insights into the methodology or the cost data that was used by communications regulator Icasa to compute its new rates.”
Both companies have also claimed that they were insufficiently consulted on the new termination rates prior to implementation. MTN says Icasa only held one meeting with them prior to making the regulations and according to their affidavit, “The meeting did not afford MTN a meaningful opportunity to be heard, and did not comply with the requirements of procedural fairness.” Giving them no opportunity to comment on the “significantly” different levels of asymmetry presented in the final regulations compared to what was stipulated in the draft regulations.
Meanwhile Vodacom’s spokesman, Richard Boorman said, “We would have far preferred to have settled this in direct discussion with the regulator, but given the inadequate consultation we have been left with no choice but to approach the courts.”
In response to MTN’s filings, Icasa decided to postpone the activation of the new rates, which were due to go line on the 1st of March, until 1 May 2014. They have subsequently changed this to the 1st of April, stating that “After further consideration and consultation with legal counsel, Icasa’s council has decided that the commencement of the 2014 regulations need only be delayed by one month,”
Icasa feels that this will be sufficient for both parties to prepare their answering papers. They also feel it is in the public’s interest that MTN’s application for interim relief be resolved as quickly as possible. There is no word yet whether Vodacom’s application will affect this.
Cell C, who as a smaller operator is on the favourable end of the proposed asymmetrical call termination rates, has said it will oppose MTN’s application “in the strongest terms”.
“This regulation is in the interest of the consumer, the telecommunications industry and the broader South African economy,” said Cell C’s Dos Santos.