Cell C ‘disappointed’ with ICASA’s revised MTR prices

10 Sep 2014

South African wireless operator Cell C has accused the country’s telecoms watchdog ICASA, which last week revealed its new proposed mobile termination rates (MTR) for the for the period 1 October 2014 to 28 February 2018, of making ‘a dramatic U-turn’. Although Cell C remains the main beneficiary from asymmetry in the period under review, the level of that asymmetry will be reduced dramatically under ICASA’s draft plan. According to a Cell C press release, ‘the massive proposed reduction in asymmetry completely eliminates any pro-competitive remedy… ICASA is now only proposing a marginal cost recovery, which is not, in terms of many international benchmarks and literature, the basis on which asymmetry is determined, and which will have the effect of entrenching the duopoly in the South African market today.’ The operator also stated that it will engage with the regulator during the consultation period to ensure that a pro-competitive environment is established, although it hinted that it will further consider all of its options.

As previously reported by TeleGeography’s CommsUpdate, on 4 September 2014 ICASA proposed new termination rates, following a Gauteng court ruling that the previous regulations were ‘unlawful and invalid’. 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). 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.