The long-awaited regulations that will determine wholesale call termination rates in SA are ready and will be published next Friday.
That’s the word from Icasa spokesman Jubie Matlou, who says he is not in a position to provide details of any planned price cuts ahead of publication of the regulations.
Wholesale call termination rates are the fees operators charge one another to carry calls on their networks. The big incumbent operators have been accused of keeping the rates high as an anticompetitive tool to keep new competitors from emerging.
Though Icasa isn’t yet providing details of what’s in the new regulations, it’s understood the authority has acceded to a request from the country’s cellular network operators to delay the first cut in termination rates until next year.
Vodacom, MTN and Cell C agreed to a voluntary cut in peak-time interconnection rates in March this year. They reduced the rate from R1,25/minute to 89c/minute.
Icasa had proposed cutting the rate again this year, to 65c/minute, but the operators cautioned that two big cuts in one year would prove damaging to them.
It’s also expected that the regulations will reveal that Icasa has backed away from initial plans for aggressive cuts to fixed-line termination rates.
Telkom complained bitterly at recent Icasa hearings that a proposal to slash fixed-line rates to 10c/minute by July 2012 was not based on a careful interrogation of the company’s costs and was “unsustainable”. The operator met with Icasa officials on 28 July to lobby its case.
Icasa had proposed reducing fixed-line termination rates to 15c/minute in July 2010, and to 12c/minute in July 2011 and doing away with a distinction in rates for local and national calls.
Market commentators have called for fixed-line and mobile termination rates to converge over a glide-path period to prevent market distortions that could lead to arbitrage opportunities and fraud. — Duncan McLeod, TechCentral