ICASA Call Termination Regulations: What the operators say
ICASA published its final Call Termination Regulations on Friday, setting guidelines regarding the termination rates of both mobile and fixed calls.
Apart from changes to the initially proposed glide path – where operators are now afforded more time before the lower termination rates kick in – ICASA further proposed that licensees other than MTN, Vodacom and Telkom may qualify for a termination rate higher than the set rate for these three firms.
A licensee may therefore qualify to charge a higher interconnect rate as long as they can prove to that they face higher costs based on its current spectrum allocation or if it is an I-ECS license holder and has a share of total minutes terminated in the respective market of less than 25 percent as of June 2009.
ICASA proposed the following new termination rates in its recently released regulations:
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Glide path for termination to a mobile location
|
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| Peak | Off-peak | |
| 01-Mar-11 | R0.73 | R0.65 |
| 01-Mar-12 | R0.56 | R0.52 |
| 01-Mar-13 | R0.40 | R0.40 |
| Glide path for termination to a fixed location | ||||
| Within ON area code | Between ON area code | |||
| Peak | Off-peak | Peak | Off-peak | |
| 01-Mar-11 | R 0.20 | R 0.12 | R 0.28 | R 0.19 |
| 01-Mar-12 | R 0.15 | R 0.12 | R 0.25 | R 0.19 |
| 01-Mar-13 | R 0.12 | R 0.12 | R 0.19 | R 0.19 |
These new regulations incorporated a fair amount of requests from the various operators, and initial feedback from the largest telecoms players suggests that they are not too unhappy with the regulations.
Vodacom, MTN and Cell C welcome new regulations
Vodacom said that they are supportive of today’s announcement on mobile termination rates by ICASA and of the goal of providing better value to customers.
“The almost 30% reduction in mobile termination rates already implemented this year has had a major impact on Vodacom’s revenue and we have been working hard to introduce cost savings programmes to offset this impact and still be able to lower our call and data rates,” said Shameel Joosub, Managing Director of Vodacom SA.
“The agreed glide path gives us time to adjust our business model in order to accommodate the significant further revenue reduction that will result from the changes announced today.”
Joosub added that it is important to emphasise that today’s announcement does not produce savings for Vodacom to pass on to customers. “It does, however, foster competition which is in turn likely to lead to lower call charges,” said Joosub.
Vodacom added that they are currently studying the provisions with respect to asymmetry and will comment on this at a later stage.
MTN also welcomed the publication of the regulations on mobile termination rates by ICASA, but said that it will offer a more comprehensive statement about the regulations soon.
“MTN notes the glide path sentiments and will need time to study and review the contents of the draft regulations. MTN will offer a statement in due course,” said Robert Madzonga, the chief corporate services officer at MTN South Africa.
Graham Mackinnon, Cell C’s Group General Counsel, said that at face value they believe the regulations on call termination rates are positive, and they welcomed the asymmetric approach in favour of the smaller operators.
“We will study the Government Gazette when it is issued on Monday and will only be able to make further comments then,” said Mackinnon.
Telkom and Neotel did not respond to questions about the new interconnect regulations by the time of publication.
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