The Independent Communications Authority of SA (Icasa) hinted on Tuesday that it could take on cellphone operators over “astronomical” pay-as-your-go rates.

The regulator’s chairman, Paris Mashile (pictured), told parliament’s portfolio committee on communications that there was an urgent need for competition in the pay-as-you-go market, which was used mainly by the poor.

“This is an area we have got to delve into and find out what we have to do to make it competitive, in terms of the prices coming down.”

The prices paid by the poorest of the poor were astronomical, he said.

Mashile was briefing the committee after Icasa’s approval of a cut in the rate charged by the three main cellphone operators to connect calls between networks.

Vodacom, MTN and Cell C last month filed an agreement with Icasa proposing a cut in the peak interconnection rate from R1,25/minute to 89c/minute on 1 March.

Icasa rejected the plan because it would have forced it to agree to a fixed gradual reduction over three years. The operators later submitted revised agreements without the “glide path”.

With the approval of those proposals, the peak rate will fall on 1 March, as initially planned.

Cellphone operators have complained that the rate cuts may lead to job cuts. Mashile said if the cell companies operated efficiently there would be no need “to cry foul that Icasa is responsible for the destruction of jobs”.

“They have gained a lot,” he said. “The 3G spectrum they have got — all over the world that spectrum was auctioned. In SA that was given to them without an auction. They were subject to social obligations.

“This whole thing of a loss of R300m they must consider as less licence fees as well as that important 3G asset that belongs to the public.”

He added: “We are conscious that fact jobs have to be created. Jobs must be sustained but not at expense of poor consumers.”

But MPs said the rate cute were only benefiting wealthier part of the population and not the poor. “Those who are running business out of cellphones are going to pocket more,” ANC MP Eric Kholwane said. “The cost of communication to the poor remains the same. There is no reduction.”

Icasa is due to release draft regulations on wholesale call terminations in March. It will hold public hearings in May and publish final regulations by June. — Sapa-AP