Mobile operator Cell C on Wednesday proposed a reduced mobile termination rate (MTR) of 75 cents for major players and 65 cents for smaller operators.<\/p>\n
Cell C had consistently called for a reduction in MTR rates and also for asymmetry to allow the smaller players to compete effectively with the bigger players, Cell C CEO Lars Reichelt told the National Assembly’s communications committee.<\/p>\n
The committee is currently holding public hearings on what it says are the excessive and exorbitant costs of MTRs in the industry.<\/p>\n
The MTR is the fee one network charges another for receiving calls on its network.<\/p>\n
Reichelt said Cell C believed the termination rates in South Africa were unjustifiably high, which in turn led to high price levels.<\/p>\n
High price levels damaged the entire economy and the poor disproportionately, he said.<\/p>\n
“Another point is we believe asymmetry brings competition and competition is what drives prices down.<\/p>\n
“So in other words, we are in favour of an immediate move to an all-day mobile termination rate of 75 cents for the dominant mobile players and 65 cents for the mobile challengers, which in this case there is one which is active.<\/p>\n
“There’s another one which is hiding in the background, which is Telkom,” he said.<\/p>\n
“We believe a once-off reduction is better than a glide-path, for a variety of reasons, the main reason being that it expedites the consumer benefits and it puts a stake in the ground.”<\/p>\n
However, the reduction had to be in line with what was “observable in the market”.<\/p>\n
Cell C also wanted to see the same MTRs for peak and off-peak times.<\/p>\n
“There’s no economic reason why an off-peak call should be cheaper to terminate than a peak call.<\/p>\n
“The network is the same. The network doesn’t care if it’s dark or if its eight o’clock or six o’clock.<\/p>\n
“And we propose the asymmetry towards dominant market players, which again promotes competition, which again is the most affective way to put pressure on retail rates and to create a downward slope,” Reichelt said.<\/p>\n
It was also important that the ultimate interconnect regime be determined by the Independent Communications Authority of SA (Icasa) through the process it was going through.<\/p>\n
“Because we truly and strongly believe that it is very dangerous if you want to tinker on the edges, and it is a quite complex process and it is quite a complex economy behind the whole thing.<\/p>\n
“So it is very important that we don’t go into a process that is guided by vox populi, but into a process that is manageable and provides the certainty also for investments to be made, which our shareholders intend to do to a very significant level going forward,” he said.<\/p>\n
The MTRs should be determined based on the costs. Icasa had to complete its process, but could speed it up.<\/p>\n
Reichelt said the intervention needed to be reasonable and measured so as not to eradicate the economic viability of the operators.<\/p>\n
“Because, fundamentally, what I think nobody wants to have is, that the things that we do today, and we can do with mobile, are due to the fact that we are economically viable entities.<\/p>\n
“The fact that people are investing in mobile networks has to do with the fact that you can make money in these entities.”<\/p>\n
Also, South African mobile operators directly employed about 13,000 people and hundreds of thousands indirectly, he said.<\/p>\n