ICASA to cut termination rates

28 Aug 2018

South Africa’s telecoms regulator ICASA has published a new draft call termination rate regulation, as part of its ‘broader programme to reduce the cost to communicate’. The watchdog has proposed that for established players – namely MTN and Vodacom – the mobile termination rate (MTR) should drop to ZAR0.12 (USD0.0084) per minute from October 2018, while the fixed termination rate (FTR) should fall to ZAR0.08. From October 2019, the regulator proposes a further drop to ZAR0.10 (MTR) and ZAR0.05 (FTR), with the rates reaching ZAR0.09 and ZAR0.03, respectively, on 1 October 2020. Meanwhile, the regulator is planning to maintain asymmetry in MTRs, with smaller players to charge ZAR0.17 from October 2018, ZAR0.15 (October 2019) and ZAR0.13 (October 2020). Similarly, asymmetry in FTRs will continue, with a proposed rate of ZAR0.09 from October 2018 and ZAR0.06 from October 2019, before the charge is abolished from October 2020. The ICASA used both top-down and bottom-up cost models to inform the determination of the ‘cost’ for call termination. The watchdog will hold public hearings once it has received written comments from the industry ‘to further engage on the input received on the key aspects and proposals of the draft regulations’.