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Mobile interconnect rates in June 2010  Comments
October 29, 2009


The Independent Communications Authority of South Africa (Icasa) said on Thursday that the process to reduce the rates of mobile calls was estimated be finalised by June 2010.

This flies in the face of calls from Communications Minister General Siphiwe Nyanda and MPs for mobile and fixed line telephone operators to drop their interconnection rates from the beginning of November to 60 cents a minute during peak times.

The communications committee said that interconnection rates in South Africa set at R1.25 per minute during peak times are exorbitant and excessive, resulting in extremely high telecommunication prices.

Operators currently charge a fee of R1.25 a minute at peak times for linking a call from one network to another.

Icasa said it had already begun the second phase process of assessing competitiveness in the call termination market "and will develop regulations to impose pro-competitive remedies in the individual markets with significant market power and which are characterised by lack of competition."

"There are several retail and wholesale markets in the electronic communications industry that need to be studied and reviewed with the aim of determining their level of competitiveness. A market that has, in recent months, attracted a much closer public and media attention is the Call Termination Market (Interconnection Rates)," Icasa said.

As long ago as 2007, the authority issued a 'Findings Document', following a public consultation process, regarding the regulation of interconnection rates) which was identified as one of the priority markets to be subjected to pro-competitive regulation.

"However, the Findings Document did not assess the competitiveness of these markets," Icasa said.

The assessment of competitiveness and the imposition of pro-competitive regulatory framework would then constitute the second phase of the process, the authority continued.


It said that it had already begun the second phase process of assessing competitiveness in the call termination market, and developing regulations to impose pro-competitive remedies.

"It is estimated that the process will be finalised by June 2010," Icasa said. MTN SA (MTN) recently moved to reiterate that it was in ongoing discussions with other operators regarding interconnection rates.

The mobile operator on Friday confirmed that an agreement had been reached with Vodacom (VOD), and the group was pursuing bilateral negotiations with Cell C and other operators.

"The two parties reached an agreement based on the parameters set in earlier negotiations, which have been under way for some time. However, it is with regret that no agreement has been reached with Cell C at this stage," it said.

Cell C chief executive Lars Reichelt said: "Cell C maintains its position on a once-off reduction of 40 percent in the peak interconnection rate and a flat rate of 75 cents, as this is common practice in 22 of 28 countries in the European Union. This international best practice leads to more competitive pricing and it is only through competition that retail rates will go down."

"In addition, and as supported by the study conducted by the European Union in 2007, mobile termination rate asymmetry is the best way to ensure a levelled playing field and again to increase competition.

"Cell C is therefore proposing that Vodacom and MTN pay the smaller operators a mobile termination rate of 75 cents per minute whilst the smaller operators, including Cell C, pay Vodacom and MTN a rate of 65 cents," he said.
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Showing page 1 of 1 comment pages, 7 total comments
14 Weeks ago rob wrote :
lars reichelt of cellc is abs. right in his aproach. i am in the telecommbiz for now 10 years in germany, and with this regulator here in europe we brought the prices down by up to 90% in the recent years. telecomms is due to the competition next to the car & engineering industry the third player in the economy and has provided an fantastic jobmachine in the years. the problem is that icasa is not an indipendent authority, but connected to the government - and guess what ??? - there are again people receiving big money for not keeping to the time table and not to open the communication market - as it is done in most of the countries - strictly stupid and unbelievable. in a recent broadband study done by cisco and the university of oxford SA is allways in the last row, with countries like nigeria&co. the corruption need to be stopped immed. regards from germany rob
14 Weeks ago Anonymous wrote :
well done cell c - mtn, vc take a page out of cell c's book about time the small operator gets it's long derserved level playing filed
14 Weeks ago typical wrote :
same old crap. lets go around & around ...............
14 Weeks ago The Punisher wrote :
Bribery and Corruption VIVA !!! That seems to be the order of the day. This is a fu*king bad joke! Seems power has finally shifted from the taxi drivers to the corporates. When is our goverment going to be who they claim to be and actually start governing?? Idiots...
14 Weeks ago Anonymous wrote :
After / near the end of the 2010 soccer world cup, so that the cell companies can really cream it up until then.
14 Weeks ago Anonymous wrote :
agree what happened to december 09 its amazing that when there is a price increase it can be done over night but when to decrease then all the cob webs and lame excuses come out of the boardrooms ,,MTN, VODACOM GET YOUR ACTS TOGETHER, you simply delaying the process in order to fill your own pockets ,,,,very poor show
14 Weeks ago Jman wrote :
This is Bullshit !!! what happened to November ?! corporate companies are really Fu*king the common people on the road. And they have the audacity to say that there is so much poverty in SA ? ICASA , Fu*k you !!!
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