Get ready for another bunfight in the telecommunications industry. Communications regulator Icasa on Thursday signalled it again intends cutting call termination rates — the prices operators may charge each other to carry calls between their networks.
Icasa has published new draft call termination rate regulations as part of its “broader programme to reduce the cost to communicate”.
Termination rates have fallen dramatically in the past eight years, from a high of R1.25/minute. Icasa said the 90% reduction in the rates “has contributed to the significant decline in retail rates over the years”.
It said a review of the market shows that call termination “remains ineffectively competitive, is characterised by significant market players and requires imposition of pro-competitive remedies in the form of price controls”.
Icasa has proposed a further “glide path”, with the rates reduced on mobile and fixed lines to 12c/minute and 8c/minute respectively from October 2018. It wants them cut to 10c and 5c in October 2019 and to 9c and 3c from October 2020.
“The authority used both top-down and bottom-up cost models to inform its determination of the ‘cost’ for call termination in this regard,” it said.
There will continue to be “asymmetry” in the rates to benefit smaller market players and foster competition. The asymmetry (or difference in price) for mobile services is proposed to be set at 5c/minute from October 2018 to September 2020 and 4c/minute from October 2020 onward. Asymmetry for fixed services is proposed to be 1c from October 2018 to September 2020 and fall away completely from October 2020.
Icasa said it will hold public hearings once it has received written comments from the industry “to further engage on the input received on the key aspects and proposals of the draft regulations”.
“The authority looks forward to receiving representations from all stakeholders on the justification for the granting of asymmetry, whether or not it should be granted for the duration of the glide path period (and/or beyond) and the reasonable level for such asymmetry.” — © 2018 NewsCentral Media