Termination rate ruling not a win, but a good start: Cell C

Cell C said in a press statement on Monday, 31 March 2014 that it believes the ruling made by Judge Mayat on South Africa’s new call termination regulations is a step in the right direction.

The operator described it as “positive for the consumer and the South African economy as a whole”.

The Independent Communications Authority of South Africa (Icasa) issued the new call termination regulations towards the end of January 2014, dropping mobile termination rates (MTRs) and affording Cell C and Telkom a higher level of asymmetry.

MTRs are the fees mobile network operators pay each other to connect calls on their respective networks.

The asymmetric rates granted to Cell C and Telkom Mobile allowed the two smaller networks to charge Vodacom and MTN more to connect calls to their networks than the larger networks could charge them.

Mayat ruled on Monday that Icasa’s regulations were unlawful and invalid, but suspended the declaration of invalidity for 6 months.

During these 6 months, Icasa’s first round of rate cuts, which were meant to run for 12 months, will be implemented.

MTRs will be dropped to 20c per minute, while Cell C and Telkom Mobile will get an asymmetric rate of 44c/minute.

“Unfortunately, Vodacom and MTN have managed to frustrate the long-term process envisaged by Icasa to increase competition in the market, which would have resulted in lower prices for consumers in the long run,” Cell C said.

“The uncertainty over MTRs over the next three years will continue to make it difficult for smaller operators to confirm their business plans beyond October 2014,” the operator added.

According to Cell C, it also negatively impacts on the smaller operators’ ability to bring down prices.

Cell C said that it will continue to cooperate with Icasa so that “it can fulfil its mandate to regulate effectively to increase sustainable competition in the telecommunications sector”.

This will ultimately reduce the cost to communicate in South Africa, Cell C said, which will benefit consumers and the economy.

“We trust that Vodacom and MTN will do the same,” Cell C said.

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Termination rate ruling not a win, but a good start: Cell C