MTN legal action caused higher Cell C prices: source

Cell C had no choice but to put higher prices on its new Infinity Prepaid and SIM-only Infinity Select contract packages than it would have liked to, according to a high-level source at the company.

This is because the call termination rate cuts instituted by the Independent Communications Authority of South Africa (Icasa) that were supposed to kick in on 1 March 2014 were delayed, the source said.

Cell C recently announced new pre-paid and contract packages, Infinity Prepaid and Infinity Select, that offer data, SMS messages, and unlimited calling for R999 per month (or per bundle).

These new packages were scheduled to launch on 1 March 2014, the same day that the latest mobile termination rate (MTR) cuts from Icasa were supposed to kick in.

This was no co-incidence, it seems.

Based on information from a high-level source at Cell C, the mobile network operator planned to use the MTR cuts to offer its new Infinity packages at far lower prices than they eventually launched with.

Instead, MTN filed an urgent application against Icasa’s new call termination regulations, which resulted in Icasa delaying the implementation of the regulations until 1 April 2014.

This means that Cell C would pay more to connect a call from their network to MTN or Vodacom’s than they may have expected to.

For this reason Cell C had to increase the prices the new products at the last minute, the source said.

It is understood that much of the call traffic from Cell C terminates on Vodacom and MTN’s networks, which means that MTRs could be expected to have a discernible impact on what it would cost Cell C to run its Infinity products.

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MTN legal action caused higher Cell C prices: source