The Independent Communications Authority of SA (ICASA) has improved the asymmetrical benefit for smaller cellphone players, and trimmed the glide path for new mobile termination rates by a year, while slightly increasing the rate in the final year.
This afternoon, the regulator said mobile termination rates would remain at 20c until next September, after which they would drop to 16c, and then 13c in the final year to September 2017. Councillor Nomvuyiso Batyi explained the regulator could still review the rates at a later stage.
Earlier this month, ICASA proposed that rates decline from 20c, to 16c, then to 12c, before settling at 8c in 2018. Its previous unveiling of the new proposed termination rate regulations was seen by commentators as a spanner in Cell C's works, while the third mobile operator expressed disappointment with what it called ICASA's "dramatic" U-turn on rates.
The disappointment came because the earlier asymmetry was considerably lower than what ICASA had initially mooted to implement in April - with Cell C and Telkom Mobile losing up to 24c of the asymmetry advantage.
The regulator had to go back to the drawing board earlier this year after the South Gauteng High Court ruled, at the end of March, the regulator's previously mooted and subsequently contested termination rates were invalid. However, those rates could be implemented for six months.
Batyi says the new rates, which come into effect on Wednesday, were arrived at after consideration of the seven written inputs into the September proposals. Chairman Stephen Mncube adds, now ICASA has focused on the cost of voice communication, it will turn its sights on the cost of data.
Not beneficial
ICASA's initial (April) rates heavily favoured smaller players Cell C and Telkom Mobile. From April, mobile termination rates for Vodacom and MTN dropped to 20c - half the previous rate - while Cell C and Telkom Mobile were able to charge the two larger players more than double that (44c) to terminate calls on their network.
Industry observers said the new proposed rates take the wind out of Cell C's sails. The operator has been SA's biggest advocate of asymmetry in mobile rates. Consumers, however, were set to win in the long run as new rates allow for simpler, cheaper call rates.
Cell C said the rates were only a "marginal" cost recovery in investment and would be anti-competitive; benefiting the mobile duopoly. It indicated it wanted the "market failure" to be rectified. Now, however, asymmetry has been improved in gradual steps from the September proposal.
The proposed rates mooted the mobile duopoly paying Cell C and Telkom Mobile 30c in the first year to terminate a call on the smaller networks. This has now increased slightly to 31c, and the 22c mooted for the second year has grown to 24c, while the 16c proposed for the final year has gained to 19c.
Richard Boorman, Vodacom spokesman, notes the operator still needs to review the rates, but it has some concerns about asymmetry granted to some operators. He, however, notes the process was constructive and a "good example of how the industry can work with the regulator to get a scientifically-based result". None of the other operators immediately commented.
Update: Since publication, Cell C, Telkom and MTN have indicated they will study the new regulations before providing comment.
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