ICASA reveals new termination rates

5 Sep 2014

South African telecoms regulator, the Independent Communications Authority of South Africa (ICASA), has revealed its proposed new mobile termination rates (MTRs) for the period 1 October 2014 to 28 February 2018, following a Gauteng court ruling that the previous regulations were ‘unlawful and invalid’, MyBroadband reports. For mobile calls, the rate remains at ZAR0.20 per minute (USD0.02) until 28 February 2015, while fixed termination rates (FTRs) will drop to ZAR0.12 per minute for calls in the same number area, and ZAR0.19 for long-distance calls. From March 2015 onwards, MTRs and FTRs will be the same, at ZAR0.16, while March 2016 will see the tariffs drop to ZAR0.12 before sliding to ZAR0.08 in the final year (starting 1 March 2017).

Further, the regulator has proposed a new way of determining whether an operator may qualify for asymmetry – a company must have less than 20% of the share of total terminated minutes in either the fixed or mobile market in order to be considered for symmetry. Previously, an operator with less than 25% of the market could quality for asymmetry termination rates. The new legislation also offers significantly lower asymmetry to smaller players such as Cell C and Telkom Mobile – from 1 October 2014, the asymmetry rate is set at ZAR0.30 per minute, or 50%, before dropping to ZAR0.22 per minute (38%) in March 2015. Further reductions to ZAR0.16 (33%) and ZAR0.10 (25%) will occur in 2016 and 2017, respectively.

As previously reported by TeleGeography’s CommsUpdate, in March 2014 the country’s two largest mobile operators by subscribers, MTN and Vodacom, launched legal proceedings challenging ICASA’s decision to halve their MTRs to ZAR0.20 per minute this year, with further cuts scheduled to follow in 2015 and 2016. MTN and Vodacom also argued that smaller operator Cell C should not gain the benefits of asymmetry as it is not a new entrant, and claimed that the regulator did not follow the correct process to determine the rates. Later that month South Gauteng High Court in Johannesburg ruled that the telecoms regulator’s decision will come into force on 1 April as planned, but would only remain in place for a period of six months, during which time the regulator would be required to review the rates.