On the eve of an historic court battle between Icasa and mobile operators MTN and Vodacom, the communications regulator has revealed in papers filed at the high court in Johannesburg that it intends reconsidering its proposed cuts to call termination rates.
In an answering affidavit submitted to the high court, Icasa says it has “taken a decision to repeal the 2014 regulations insofar as they purport to regulate call termination rates beyond 31 March 2015”. The rates are the fees operators charge each other to carry calls between their networks. Icasa wants the rates reduced to stimulate retail price competition.
It says its “process of reconsideration” will probably take six months, but “certainly no longer than a year”, to complete. But it still wants a cut in the rates, from 40c to 20c/minute, implemented on 1 April.
Vodacom and MTN have filed papers at the high court seeking both an urgent interim order setting aside implementation of the new rates and a full judicial review of Icasa’s final regulations. They have accused Icasa of not following the correct procedures in drawing up the regulations. The court is expected to hear the matter beginning on Tuesday.
Icasa has proposed an aggressive level of asymmetry that favours smaller market players, including Cell C. If Vodacom and MTN are not successful in their court bid, then from 1 April Cell C and other smaller players will pay them 20c/minute to terminate a call, whereas they will pay 44c/minute for calls sent the other way.
Icasa now says that it only wants the published cuts — which would have taken termination rates to 15c/minute in 2015 and 10c/minute in 2016 — implemented for 2014. It’s not clear why the authority has changed its mind about year two and three of the regulations.
Because it’s planning to revise the termination rates for 2015 and 2016, Icasa says in its affidavit that the “only alleged irreparable harm conceivably relevant to the present application is the harm said to arise from the first year of the operation of the 2014 regulations”.
“Much of the alleged irreparable harm relied on by MTN and Vodacom does not relate to this 12-month period,” it says.
Icasa argues that if the 2014 regulations are prevented from coming into force on 1 April, it will mean that call termination rates will be “effectively unregulated for the period of many months or years that the interim interdict endures”.
“This is despite the fact that MTN and Vodacom (and other players in the industry) do not dispute that Icasa is entitled to regulate mobile call termination rates, that it is important that it does so and … that the rates set by the 2010 regulations are no longer appropriate and need to be reduced.
“Granting the order sought would involve very serious separation-of-powers concerns by virtue of the court’s incursion into terrain properly reserved for Icasa, which is an expert and independent regulator established under the constitution.” — (c) 2014 NewsCentral Media