Vodacom has joined MTN in filing papers at the high court in Johannesburg seeking to overturn the implementation of communications regulator Icasa’s cuts to wholesale mobile call termination rates.
The move comes a week after MTN filed papers at the high court in Johannesburg seeking an interim order stopping the rate cuts from taking effect on 1 March. Icasa responded by pushing out the cuts to 1 May, and then 1 April, to allow its external legal team time to prepare for battle.
Like MTN, Vodacom is seeking an interim order to set aside the implementation date as well as a review application challenging the legality of the process followed by Icasa.
MTN and Vodacom are vehemently opposed to the cut in the rates, which operators charge each other to carry calls between their networks.
They’re especially upset about the fact that Icasa has mandated an aggressive “asymmetry” that benefits Cell C and Telkom Mobile to the disadvantage of their bigger rivals. Vodacom and MTN argue that Cell C, in particular, does not deserve to benefit from asymmetry given that it is no longer a new operator.
The court case looks set to be one of the biggest and most important in the history of South Africa’s telecommunications industry, with billions of rand at stake.
Icasa is lowering termination rates, and introducing “asymmetry” that favours smaller operators Cell C and Telkom Mobile, in an effort to force down retail prices and increase competition in South Africa’s mobile sector, which is dominated by MTN and Vodacom, which together have about 90% of the market by revenue.
TechCentral understands that Vodacom decided to file papers itself because its lawyers are worried that MTN’s case is weak.
Vodacom isn’t saying much yet. Its spokesman, Richard Boorman, says the company supports lower mobile termination rates and that the issue is not whether the rates come down but “ensuring that the legislated fair and objective process is used to determine the final rates”.
“Icasa has not followed this process and as a result our customers will be unfairly prejudiced,” says Boorman. “We would have far preferred to have settled this in direct discussion with the regulator, but given the inadequate consultation we have been left with no choice but to approach the courts.”
He says Vodacom stands by a previous proposal to Icasa that an interim rate cut be implemented immediately to “ensure that the rates continue to come down and at the same time provide breathing room to follow the correct, legislated process to determine the final rates”.
Vodacom’s decision to file papers is likely to raise industry tensions further. Already, Cell C has taken direct aim at MTN, appealing to the public for support in new YouTube and radio advertisements over mobile termination rates. — (c) 2014 NewsCentral Media
