The Independent Communications Authority of South Africa (Icasa) is giving telecommunications operators more time to comment on draft call termination rate regulations, announced 10 days ago, that sent the share prices of MTN and Vodacom plunging and Telkom surging.
Icasa published the draft regulations in Friday’s Government Gazette, a week after announcing them. It had proposed giving interested parties 14 working days to respond, but has now extended this to 30 working days.
Icasa has proposed sweeping changes to termination rates, or the fees operators charge one another to carry calls between their networks. These include cutting the base mobile termination rate from the current 40c/minute to 20c/minute in March 2014 and introducing aggressive “asymmetry” that favours smaller players Telkom Mobile and Cell C. In terms of this asymmetry, the smaller players will be paid significantly more by Vodacom and MTN to carry calls from their networks than the other way around.
Earlier this month, Icasa said it believed the market remained “ineffective with high levels of concentration” and that further asymmetry was necessary to “promote investment and encourage competition”.
The move forms parts of a programme by Icasa to reduce the cost of electronic communication in South Africa.
Cell C CEO Alan Knott-Craig cautiously welcomed the proposed cuts, saying that although he’d have “wished for a better outcome” for his company, the cuts would lead to a “more competitive and balanced” market.
In the days following the announcement, Vodacom and MTN’s share proces took a battering, while Telkom’s climbed by almost 5% in a single day.
Vodacom says it supports the proposed cuts but has expressed concern over the proposed changes to asymmetry, with Vodacom Group CEO Shameel Joosub claiming that the move puts the operator and its customers in the position of “effectively subsidising” other operators. — (c) 2013 NewsCentral Media