The simple truth: Icasa messed up

On 31 March 2014, the South Gauteng High Court judge Haseena Mayat declared the “Second Call Termination Amendment Regulations, 2014” invalid and unlawful.

Judge Mayat suspended the declaration for six months to give the Independent Communications Authority of South Africa (Icasa) time to review its call termination regulations.

Vodacom and MTN were therefore correct – Icasa messed up and has not followed proper processes to determine the call termination rates.

Icasa basically admitted this when they released their “Second Call Termination Amendment Regulations, 2014”, which did away with mobile termination rate changes for 2015 and 2016.

According to Mayat’s ruling Icasa did not base its mobile call termination rates on cost calculations. She added that the current 20c per minute rate was simply an arbitrary number somewhere between 40c and 10c.

Icasa failed to justify any of the mobile termination rates, clearly showing a lack of proper processes which could be defended in court.

Icasa GM Pieter Grootes said that the regulator is happy to review its regulations as it was no longer satisfied with the robustness and effectiveness of the 2015 and 2016 termination rates.

This statement by Grootes is very different from his comments in January 2014 that Icasa was confident that it followed the needed processes to reach its published termination rates.

“We obviously would not have published these rates if we did not think we have an idea of both following the process as well as that we had considered all factors in order to make these decisions,” Grootes said in January.

“That [the call termination rates] is our final decision on this matter,” Grootes added. Icasa also said in February that the “2014 Call Termination Regulations remain until such time that the court decides otherwise…”.

These statements proved to be less than prophetic. Icasa’s second amendment to the 2014 call termination regulations clearly showed that it was not Icasa’s final decision.

The uncertainty which now follows is not good for anyone. “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,” said Cell C CEO Jose dos Santos.

“It also negatively impacts on the smaller operators’ ability to bring down prices to ensure all South Africans have access to affordable communications.”

More on the call termination regulations, 2014

Hollow victory for MTN, Vodacom in termination battle

Cell C warns of higher prices, network concerns

What Vodacom, MTN, Cell C, Telkom really mean