Vodacom SA considering legal action against ICASA

10 Feb 2014

South African cellco Vodacom is reportedly considering legal action against the Independent Communications Authority of South Africa (ICASA), with regards to the watchdog’s decision to introduce aggressive asymmetry in wholesale mobile termination rates (MTRs), local news agency Agence Ecofin reports. According to the article, the move was announced by the company’s CEO Shameel Joosub; the executive observed that the new tariffs could lead to losses of around ZAR1 billion (USD90.2 million) for the company.

As previously reported by TeleGeography’s CommsUpdate, in January 2014 ICASA announced higher asymmetry in MTRs, effective 1 March 2014. The new rules favour smaller network operators Cell C and Telkom Mobile, with Robert Pasley, Cell C’s chief financial officer, saying: ‘As far as I am concerned, the draft regulations gave us a reasonable shot at becoming a sustainable competitor. This only increases our chances of being successful’. Pasley also stated that market leaders Vodacom and MTN South Africa would be successful in challenging the final decision in court, ‘because the underlying costs of termination are broadly in line with where ICASA is going. There are many pro-competitive and pro-public interest reasons that ICASA has come out with this regulation.’