Vodacom to legally challenge ICASA

South Africa’s Vodacom plans to launch a legal challenge against a regulatory cut in fees mobile carriers are allowed to charge each other, its chief executive said on Wednesday.

Shameel Joosub also told analysts on a call the planned cut in mobile termination rates by South Africa’s communications regulator could cost the company 1 billion rand ($90 million) in the 2015 financial year. ($1 = 11.1242 South African rand)

The Independent Communications Authority of South Africa (Icasa) unveiled the new call termination rates on 29 January 2014, which will see significant cuts to mobile termination rates over the next three years.

Call termination rates are what one operator charges another operator to terminate a call on its network. For example, if a Vodacom subscriber makes a call to an MTN subscriber, Vodacom will pay MTN to terminate that call on its network.

Year Mobile termination rates Fixed termination rates
Regulated rate Asymmetry Regulated rate Asymmetry
2014 R0.20 R0.44 R0.12 R0.16 R0.13 R0.21
2015 R0.15 R0.42 R0.12 R0.12 R0.13 R0.13
2016 R0.10 R0.40 R0.10 R0.10 R0.13 R0.13
2017 R0.20 R0.13 R0.13

WON: Within Area Code | BON: Between Area Codes

(Reporting with Reuters by David Dolan; Editing by Ed Cropley)

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Vodacom to legally challenge ICASA