The Independent Communications Authority of South Africa (Icasa) has revealed its new proposed mobile termination rates at a press briefing on Thursday, 4 September 2014. The rates will be effective for the period 1 October 2014 to 28 February 2018.
The communications regulator still plans to push down the rates, just not as quickly as originally envisaged. They intend to reduce mobile termination rates on both fixed and mobile calls to just 8c/minute from 1 March 2017. The rate of “asymmetry”, which benefits smaller players, has also been reduced substantially.
For mobile, the rate remains at 20c/minute until the 28 February 2015. For fixed, the rate is 12c/minute for calls in the same number area and 19c for longer-distance calls.
From March next year onwards, the rate for mobile and for all fixed calls will be the same for the rest of the regulated period. The rate next year falls to 16c/minute. In March 2016, it will fall again to 12c/minute. In the final year, starting in March 2017, it will drop to 8c/minute.
At the same time, the rate of asymmetry — where smaller players receive more for calls from bigger operators — has been reduced substantially. From 1 October 2014, the asymmetry rate for smaller players is 30c/minute, or 50%. It will then drop to 22c/minute, or 38%, in March 2015. Further reductions to 16c/minute (33%) and 10c/minute (25%) will occur in 2016 and 2017.
The same asymmetry reductions in percentage terms will take place for calls to fixed lines. To qualify for asymmetry, operators must have less than 20% share of total terminated minutes for either fixed or mobile. Previously, Icasa had mandated 25% market share.
According to Icasa councillor Nomvuyiso Batyi, they were able to calculate these new numbers using data from each of the licensees, where previously they had to utilise publically available information.
In response to the new rates Cell C has lashed out at Icasa, saying that the industry regulator is entrenching the duopoly of Vodacom and MTN.
They do not agree with the dramatic reduction in asymmetric rates for smaller mobile networks, and the change in the way operators qualify for asymmetry.
Telkom on the other hand is set to benefit from the new proposed rates as Icasa’s proposed changes allow fixed-line operators to charge other carriers to connect calls to their networks. In addition to this Icasa has proposed that fixed-line and mobile call termination should be equal from 1 March 2015.
In March, the high court in Johannesburg found that Icasa’s previous call termination regulations were “invalid and unlawful” but, in a surprising move, said the cuts to termination rates would take effect as planned on 1 April for a period of six months.
In terms of the court order, Icasa had until 30 September to publish the new call termination rate regulations.