Consumers may have to wait for mobile price cuts
In November last year the Minister of Communications Siphiwe Nyanda announced that he has reached an agreement with Cell C, Vodacom and MTN to reduce the peak mobile termination rate (MTR) by 36c per minute, from the current R1.25 per minute to 89c per minute.
This change was set to kick in by the end of March, something which prompted companies like Vox Telecom to preemptively reduce their call rates in anticipation of these looming interconnect price reductions. Telkom has also confirmed that it will pass the full interconnect rate cut to their customers. Telkom said that it is “committed to passing through the full benefit with regard to reduced interconnect rates to our customers.”
ICASA has now announced that it will not approve the MTR agreement from the mobile operators to voluntarily cut interconnect rates. According to ICASA the agreement from the mobile operators sought to bind the Regulator to not review MTRs until March 2013, and it was therefore unwilling to review the agreement in its current form.
“The Authority is committed to releasing draft regulations on the effectiveness of competition in the wholesale call termination market in March 2010. It is hoped that the outcome of these regulations will be a reduction in call termination charges as well as fair and equitable access to existing networks for all licensees,” ICASA said in a press statement.
Telkom’s Group Executive for Regulatory Affairs Andrew Barendse confirmed that the new termination rates have not yet been agreed to between ICASA and the mobile cellular operators (MCOs), and that this will delay their new pricing plans. “Only when this is finalised, will Telkom be able to file its new tariffs with ICASA,” said Andrew Barendse, Telkom’s Group Executive for Regulatory Affairs.
Vodacom CEO Pieter Uys said today that interconnect rates may still be reduced in March, but that it is becoming very challenging if they don’t have an agreement with ICASA. Uys added that the mobile operators will again meet with ICASA today to try and resolve any problems which ICASA may have with the agreement.
MTN said that their intention is to implement the rates that have been the subject matter of much debate. “There are however regulatory requirements to comply with such as the appropriate determination by the regulatory Authority that the interconnection amendment agreements comply with the regulations. We received a letter from the Authority yesterday and note that the Authority has expressed its concerns. MTN will attempt to address those concerns in the next few days,” said Graham De Vries, MTN SA’s General Manager of Regulatory.
Cell C reiterated that ICASA has not approved the voluntary reduction in interconnect tariffs as lodged with them and have, for now, not offered an alternative to the operators. “Cell C is hopeful that a solution can be found as a reduction in interconnect is vital for the competitiveness of the market. Any reduction must have the approval of ICASA,” said Cell C CEO Lars P Reichelt.
ICASA was contacted to gain more clarity on the issue, but the Regulator would not elaborate on the situation. The ICASA media department surprisingly said they should not be contacted for this type of information. When quizzing the Regulator further about the statement and recent developments, they asked ‘not to be abused’, adding that there is a ‘new manager’ and that things are effectively in disarray.
Consumers may have to wait for mobile price cuts – Discussion
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