Dirty tricks of telecoms interconnect laid bare

The Independent Communications Authority of South Africa (ICASA) started their public hearings for the Draft Call Termination Regulations on Monday June, 28 and it concluded today Wednesday June, 30. 

A variety of different views were put before ICASA’s panel with the established operators lashing out at the regulator for its proposal of a sudden and drastic reduction for both mobile and fixed line termination rates. 

Cell C went one step further and argued that asymmetric interconnect rates should be applied to increase competition and assist new market entrants.

Smaller operators argued for a symmetrical interconnect rate which does not distinguish between mobile and fixed line call termination, with a figure of between 20c and 25c per minute being bandied around.

Most of the arguments from the large operators and smaller players were as predicted, but it was not until the last presentation of the proceedings that some of the challenges on interconnection became abundantly clear.

Vox Telecom MD Douglas Reed did not pull any punches in his presentation, naming and shaming various players which have made it difficult for his company to compete in the local voice market.

Reed told ICASA that ‘MTN delayed the implementation of Vox Telecom’s initial offerings via interconnect by almost 12 months by extending the negotiations and delaying the signing thereof’.

“Today at the end of June, Vox are still interconnecting with MTN at R1.25 per minute despite the fact that MTN supposedly dropped their peak rate to 89 cents from 1 March,” Reed said.

In another turn of events Reed explains that MTN now wants Vox to pay them 89c per minute to terminate calls while they will pay Vox only 50c per minute, a process which is again stalling proceedings.  “In the mean time this is costing Vox millions of Rands as we have been passing on the benefit of lower interconnect rates to our customers since December 2009,” said Reed.

“Ex-employees of MTN have told us that it was common knowledge to use delay tactics when it came to interconnect,” said Reed.

Reed however did not stop with MTN, and said that Vodacom threatened to cancel their interconnect agreement with Vox Telecom for the same reason as MTN, and here Vox capitulated to avoid any service disruptions.

Reed further questioned Vodacom’s business ethics.  “Vodacom declared that the business model of some of Vox’ customers was against the interconnect agreement, i.e. using the Call Termination rate to pay for cheaper international calls.”

“When Vodacom failed to get their way they set up the same business at their subsidiary Gateway, and then proceeded to mine their subscribers’ records and notify all of them by SMS of their new service, i.e. all their subscribers dialing Vox numbers,” said Reed.

When it came to Telkom Reed told ICASA that Telkom is using every excuse in the book, ranging from capacity problems to the 2010 World Cup, to delay number portability.

“We have interviewed past employees of Telkom who told us their job was to degrade Vox’s quality in the early stages a few years ago,” said Reed.

Neotel was not spared.  According to Reed Neotel inferred that if Vox did not invest in infrastructure they would have no call termination costs.  “That would be true if the infrastructure we leased from them was done so for free … I am not sure,” joked Reed.

Reed said that he would like to see watertight Call Termination Regulations to avoid the large players making a mockery of the regulations by exploiting loopholes.  Reed further suggested a symmetrical interconnect rate of 20c per minute.

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Dirty tricks of telecoms interconnect laid bare