Big announcement about call costs in South Africa

The Independent Communications Authority of South Africa (Icasa) has published amendments to the country’s call termination regulations.

Icasa said this is to prevent market failures such as a lack of provision of access, potential discrimination between telecommunications licensees, lack of transparency, and inefficient pricing.

Wholesale call termination rates are the fees network operators charge one another for connecting calls from rivals to one of their subscribers.

For example, if a Vodacom subscriber calls someone on MTN’s network, MTN charges Vodacom a fee.

“To address the market failures identified, an electronic communications network services (ECNS) and electronic communications services (ECS) licensee must charge fair and reasonable prices for wholesale voice call termination,” said Icasa.

In the interest of competition, Icasa said it regulates call termination fees differently for dominant mobile and fixed termination players, or those who have benefitted from economies of scale.

It has identified Vodacom and MTN as the dominant players in the mobile termination market, while Telkom is the dominant player in the fixed termination market.

These licences must comply with various regulations, including charging voice call termination rates as set out by Icasa.

The regulations also mandate that MTN, Vodacom, and Telkom publish Reference Interconnection Offers (RIOs) with their standard call termination rates, which must be based on Icasa’s specified rates.

Other players may then interconnect with the dominant operators on the basis of their RIOs, without negotiation.

Failure to publish RIOs or comply with Icasa’s call termination rates could land network operators hefty fines.

Those who charge more than the call termination rates set out by Icasa will be fined R500,000, while those who fail to publish RIOs will face a fine of up to R1 million.

The authority has set different rates for “new entrants”. It defines a new entrant as a licensee who has been in the market for less than three years, thus excluding players like Telkom and Cell C.

This means that players identified as new entrants can charge higher rates than the dominant players charge them for their first three years in the market.

However, even though Cell C and Telkom are no longer new entrants, they will still benefit from a level of asymmetry until 30 June 2026.

Icasa has specified a separate glide path for the termination rates of small operators, which will be brought into alignment with large networks from 1 July 2026.

The table below summarises the mobile and fixed call termination rates Icasa published on Monday.