A meeting between the Independent Communications Authority of SA (Icasa) and telecommunications operators over mobile interconnection fees has broken down. It had been hoped that operators would reach agreement at the meeting, held this morning, to reduce the fees.
Mobile interconnection fees are what the cellphone providers charge one another and other operators to carry calls on their networks. They are set at a relatively high R1,25/minute during peak times.
It is understood from sources who attended today’s meeting that although Vodacom and MTN agreed to a new rate, objections over the proposal from Cell C resulted in the dissolution of the talks.
Cell C CEO Lars Reichelt says Vodacom and MTN have made it clear that they wanted to “maintain the status quo”.
“MTN sent us an e-mail at 8.45pm last night with a proposal that is completely unacceptable as it doesn’t lower the R1,25 rate dramatically,” Reichelt says. “MTN has proposed a cosmetic correction.”
Cell C has been pushing for an asymmetric interconnection agreement in which it pays less to other operators than other operators pay it for interconnection. Vodacom Group CEO Pieter Uys has said previously that Vodacom would not support an asymmetric interconnection agreement that would benefit Cell C. Vodacom said today that it did not believe that Cell C is a new entrant to the market and therefore did not support Cell C’s assertion. “However, we continue to support the process and trust that an agreement will be reached shortly.”
MTN has effectively blamed Cell C for the breakdown in the talks. It says it and Vodacom reached an agreement that would have seen peak and off-peak interconnection rates reduced immediately by about 19% on average, to 78c/minute (blended peak and off-peak), with further reductions year-on-year for the following three years to 61c/minute blended.
“In terms of due process, the two parties will now need to lodge the agreement with Icasa for regulatory oversight,” MTN says.
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