Mobile network blackouts warning from MTN

MTN SA CEO Zunaid Bulbulia warned that the latest mobile termination rate (MTR) cuts may lead to mobile network blackouts in South Africa, Bloomberg reported.

The Independent Communications Authority of South Africa (Icasa) unveiled the new call termination rates on 29 January 2014, which will see mobile termination rates reduced from the current 40c per minute to 10c per minute over the next three years.

These reductions, Bulbulia said in a Bloomberg interview, will have dire consequences for the local mobile industry.

“Implications for the industry going forward are an Eskom-type outcome where there’s rolling blackouts of the network because we just don’t have the free cash in our business,” Bulbulia told Bloomberg.

He added that MTN may give greater focus to other countries ahead of South Africa as result of latest mobile termination rate reductions. He added that jobs and investments will be placed at risk.

In an official statement Bulbulia said that MTN does not support the proposed mobile asymmetrical rates and believe these to be unsubstantiated.

Asymmetry means that the large operators (Vodacom, MTN) will pay the smaller operators (Cell C, Telkom Mobile) more to terminate a call on their network than the other way around. This will help the smaller operators to compete more effectively against the larger players.

“MTN will also have to scrutinise and consider a number of other due process concerns once the regulation is published,” said Bulbulia.

Bulbulia told Bloomberg that legal action is an option for them regarding the latest mobile termination rate cuts.

More on mobile termination rates

Vodacom, MTN’s fears now a reality

New call termination cuts announced

Icasa playing with fire with MTRs: MTN CEO

The tough questions about MTR price cuts