Wholesale mobile call termination rates will not be cut on 1 July, as previously envisaged by the Independent Communications Authority of SA (Icasa).

But Icasa chairman Paris Mashile is adamant that “the sun will not set on the last day of July” without the new rates being implemented and has warned the operators not to engage in delaying tactics.

Icasa wants the rates, which the mobile operators charge each other and other telecommunications companies to carry calls onto their networks, reduced substantially between now and July 2012.

The rates, set at 89c/minute in peak calling times, have been blamed for keeping new competitors from emerging in SA’s mobile industry and for keeping retail call charges high.

The industry has warned that dramatic cuts could damage the main players in the sector, with at least one operator, Vodacom, already embarking on a programme of cost cutting to try to offset the impact of the lower rates on its revenue line and profits.

Mashile says Icasa has agreed to delay the implementation of lower termination rates at the industry’s request. However, he warns that whatever happens, the lower rates will be introduced by 1 August.

The mobile operators agreed to a voluntary reduction in the rates on 1 March when they fell from R1,25/minute in peak times to the current 89c. Icasa wants the rate reduced to 65c this year, to 50c in 2011 and 40c in 2012. The new rates, if implemented, will apply in both peak and off-peak periods.

The authority has called hearings for late June, at which time it will hear submissions on the issue from the cellular industry and other players in the sector. The operators are expected to lobby for less dramatic cuts in the rates, and for them to take place over a longer period of time.

“I do hope this isn’t a delaying mechanism by the operators,” Mashile says of the industry’s request for more time. “They can run but they can’t hide. It will happen. It’s inevitable, like death and taxes.” — Duncan McLeod, TechCentral