It’s official. MTN has fired the first shot in what looks set to be one of the biggest ever legal battles in South Africa’s telecommunications industry.
The mobile operator has lodged an application at the high court in Johannesburg to have telecoms regulator Icasa’s regulations governing wholesale call termination rates set aside. It is also seeking an urgent interdict to prevent the regulator from imposing the first cut in the rates in two weeks’ time, on 1 March, when the prices are supposed to fall by 50% to 20c/minute.
Call termination rates are the fees operators charge each other to carry calls between their networks. Icasa is slashing the rates over the next few years in an effort to bring down retail prices. It is also introducing rules that favour smaller players, including Cell C. Both Vodacom and MTN have objected to this “asymmetry”.
Vodacom has hinted strongly that it plans to file legal papers of its own, but hadn’t done so at the time of publication.
In a notice of motion filed at the high court on Wednesday, MTN has asked for an interim order in which Icasa’s call termination regulations are suspended until the matter — including any appeals that may be lodged — has been heard by the courts. It wants the industry to continue paying the current call termination rate — 40c/minute — until the legal process has been fully exhausted.
MTN has given Icasa until 4pm on Friday, 14 February to indicate whether it plans opposing the application for the urgent interim order.
The court papers, which run to 400 pages, make it clear that MTN intends fighting the regulations on a wide range of grounds, including that there was “procedural unfairness” in drawing them up as well as “defects in the process”. It argues, too, that the regulations are “arbitrary”, “irrational” and “unreasonable”.
In a founding affidavit lodged with the high court, MTN South Africa CEO Zunaid Bulbulia says that “despite repeated requests”, Icasa did not provide the operator access to underlying cost data it relied on to create the regulations.
“MTN was not furnished with any of the cost modelling allegedly used by Icasa to derive its target termination rates and the proposed asymmetry levels,” Bulbulia says. “This was grossly unfair, since it meant that MTN was deprived of any opportunity to engage meaningfully with Icasa.”
He says, too, that Icasa afforded MTN a “single, one-on-one meeting before the 2014 regulations were made”.
“The meeting did not afford MTN a meaningful opportunity to be heard, and did not comply with the requirements of procedural fairness,” Bulbulia says.
In addition, MTN was not given an opportunity to comment on “significantly” different levels of asymmetry introduced in the final regulations, compared to those proposed in the draft regulations published in 2013.
“Remarkably, the first time that MTN learned of the revised asymmetry rates was when Icasa held [a] press conference on 29 January 2014.” — (c) 2014 NewsCentral Media
