Cell C, the big winner in Tuesday’s publication by telecommunications regulator Icasa of wholesale inter-network call rates for the coming four years, has lauded the authority’s decision to introduce aggressive “asymmetry” that favours it and other smaller network operators.
Cell C chief financial officer Robert Pasley says the level of asymmetry — which disfavours network operators with more than 20% retail market share — is even stronger than what Icasa had proposed in draft regulations published in 2013.
The move is likely to provoke a backlash from Vodacom and MTN, though neither company was in a position to provide comment immediately.
“The asymmetry is better [than in the draft regulations],” says Pasley. “It’s higher in the first year, and then it climbs. As far as I am concerned, the draft regulations gave us a reasonable shot at becoming a sustainable competitor. This only increases our chances of being successful.”
He describes Icasa’s move as “really good for the whole economy” as retail prices are “still too high”. He says Cell C will adjust its retail tariffs as a result of the final regulations, but warns that Cell C’s rates are already very competitive so consumers shouldn’t expect dramatic price reductions.
It is “quite possible” that Vodacom and MTN will challenge the final regulations in court, though Pasley says it is “unlikely” that they will be successful in any application “because the underlying costs of termination are broadly in line with where Icasa is going. There are many pro-competitive and pro-public interest reasons that Icasa has come out with this regulation.”
Reunert subsidiary Nashua Communications has also welcomed the cuts, saying they are in line with international best practice. Nashua Communications CEO Andy Openshaw says the regulations “should bolster competition in the mobile and fixed voice markets”.
“The new rates promote sustainable competition and support competitive pricing in the market,” Openshaw says. — (c) 2014 NewsCentral Media
