MTN South Africa has defended its unilateral implementation from November 2014 of a US$0,25/minute interconnection fee on international inbound calls and has warned the Independent Communications Authority of South Africa (Icasa) that it will take the matter to court unless the communications regulator backs down on a decision to block the operator from imposing the fee.

Earlier this month, in response to a complaint lodged by the Internet Service Providers’ Association, Icasa informed MTN that it is required to charge an interconnection fee of R0,20/minute, no matter where the call originates.

Icasa says its September 2014 call termination regulations, which set the fees that operators may charge each other to carry calls between their networks, make no distinction between voice calls originating within and outside the borders of South Africa.

“By charging a different rate for termination between licensed operators in the manner that it has, MTN is in breach of the non-discrimination principles of … the Electronic Communications Act,” according to Icasa.

But MTN South Africa CEO Ahmad Farroukh has rubbished Icasa’s decision, telling TechCentral in an exclusive interview that there needs to be an increase in termination rates on international inbound calls to address the “huge imbalance between what South Africa pays international operators and what South African operators receive in return”.

“Most of the small players don’t understand the business and the easiest thing in life is to accuse MTN of wrongdoing,” Farroukh says.

He says MTN will first “engage” with Icasa with a view to having the decision set aside. “If it has to go to court, we will go to court.”

Icasa is wrong when it states that the termination rate regulations refer to all calls, whether local or international, Farroukh says.

By setting the termination rate for inbound international calls at $0,25/minute, MTN would make $5m/month in revenue compared to $320 000/month now. This would raise additional tax revenues for the government and would not have a negative impact on South African consumers, he says.

“What is the impact on the consumer? Nil. It’s just a lost opportunity for us to pay more taxes and have more foreign currency in the country … without sweating.”

He says MTN paid foreign operators R1bn in 2014, while it collected only R65m in return. “All we’re trying to do is balance that.”