Johannesburg – On Friday (4 October 2013), the Independent Communications Authority of SA (Icasa) proposed a cut of up to 75% over the next three years in the fees mobile phone companies can charge rivals to use their network.
It released its draft call termination regulations, considerably reducing the cellphone call rates of some networks.
Icasa councillor William Stucke said the current cellphone call rate of 40 cents a minute levied by operators like Vodacom [JSE:VOD] and MTN [JSE:MTN] would drop to 20 cents a minute in 2014, 15 cents in 2015 and 10 cents in 2016.
Icasa also introduced an asymmetric rates system for smaller operators with a market share of less than 20%, like Cell C and Telkom Mobile.
Under the asymmetric system, the current cellphone call rate of 44 cents a minute would drop to 39 cents in 2014, 33 cents in 2015, and 26 cents in 2016. It would reach 10 cents a minute by 2019.
“In effect, Cell C and Telkom Mobile qualify to charge these asymmetric rates,” said Stucke.
The asymmetry was based on scale imbalances and was aimed at promoting investment, encouraging competition and fostering small, medium and micro enterprises.
Termination rates are the fees operators pay to connect calls between networks.
In 2010, Icasa determined that ineffective competition existed in the provision of call termination because of inefficient pricing.
“The authority finds that the market remains ineffective, with extremely high levels of concentration…,” said Stucke.
The draft regulation was due to be published shortly in the Government Gazette for public comment.
Companies will have 14 days to comment on the draft regulations.