Price cuts on ICASA agenda
The Independent Communications Authority of South Africa (ICASA) has extended an invitation to telecommunications industry stakeholders to attend the launch of its Cost to Communicate programme on Friday (7 June 2013).
“The Cost to Communicate Programme seeks to review related regulations that impact on the cost of communications in South Africa such as the Call Termination Regulations and the Local Loop Unbundling Framework,” ICASA said in a press statement issued today (5 June 2013).
ICASA said it acknowledged reductions in the mobile and fixed line telephony retail prices as a result of the introduction of the mobile termination rates glide path. However, it added that it remains concerned that the costs of communication are still high, and competition is this market is still inadequate.
Prior to the last round of termination rate cuts in March 2013, Cell C requested that ICASA reassess the call termination regulations to let smaller operators (e.g. Cell C, Telkom Mobile) charge their larger competitors (e.g. Vodacom, MTN) higher prices for making calls to the smaller networks.
ICASA went ahead with the planned rate cut, bringing peak and off-peak mobile termination to R0.40, local fixed calls to R0.12 during peak times and off-peak times, and the rate for national calls on fixed lines to R0.19.
After the rate cut, smaller operators are allowed to ask larger operators 10% more than the above rates.
The regulator then promised that it would do a market review in the next financial year to determine what should happen to termination rates in the years ahead. Cell C responded positively to ICASA’s decision.
Local Loop Unbundling appears to have ground to a halt in South Africa, with ICASA saying it is looking at a way to address Telkom’s “access-line deficit”, or the loss the company makes on its last-mile services.
“The Cost to Communicate Programme is the Authority’s mainstay,” ICASA said. “The call to reduce communication costs is echoed in various platforms, including the recent Minister’s Budget Vote.”
In her Budget Vote speech, Minister of Communications Dina Pule announced that she “intends to issue a policy directive on transparent pricing of services such as SMS, Voice and Data to ensure market pricing transparency for the benefit of consumers”.
According to ICASA, its Cost to Communicate programme will accommodate the Minister’s Policy Directive when it is issued.
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