In a move that will likely not make the mobile operators happy, the Department of Communications (DOC) will issue a policy directive to the regulator to force interconnect rates to cost level by November this year. This would put an end to operators' making profit off interconnect rates.
In an interview with ITWeb this afternoon, communications director-general Mamodupi Mohlala said the department felt it was time to take a stand and make a concrete intervention on behalf of every consumer in SA. “There has been enough twittering around the issue.”
She said the DOC will present the policy to the Parliamentary Portfolio Committee on Communications when it meets on Wednesday coming and will encourage its implementation. The directive is the first of a three-phase initiative the department hopes to implement over the coming months to stem the cost of communication in SA.
The regulator, the Independent Communications Authority of SA (ICASA) will have to issue regulations which will force operators to cut the interconnect rate to what it actually costs them, rather than hold it at an inflated rate.
According to Mohlala, the department has been in discussions with all the mobile operators over the last few weeks to see whether an agreement on interconnect could be reached. However, she added that the operators were not as forthcoming as the department had hoped.
We wanted to negotiate, but they [mobile operators] have left us with no other option. We will now instruct ICASA to drop the rates.
Mamodupi Mohlala, DOC director-general
“We wanted to negotiate, but they have left us with no other option. We will now instruct ICASA to drop the rates.”
Mohlala said the November deadline for the rates has been decided to save consumers the high cost of communications over the holidays. “The traffic over the networks increase over that time, especially on SMS. We want consumers to benefit before then,” she added.
While the DG explained that both ICASA and department know what the actual cost of interconnect is for each of the operators, she would not disclose the figure. “We don't want to hamstring ICASA on the matter,” she explained.
The parliamentary portfolio committee and cabinet are unlikely to deny the department its new directive. The committee has also been vocal on bringing down the interconnect rates and has questioned ICASA's ability to police the operators.
Mohlala said the second phase of the initiative will be to compile a tariff advisory council, made up of consumers, representatives from the regulator as well as the operators. The council will be used as a public discussion platform before tariffs are accepted by ICASA.
While the department has not yet set the timeline of the compilation of the council, Mohlala said it will be soon. “We want to proactively engage consumers on the matter,” explained Mohlala.
She said having a council in place will lead to the third part of the initiative, which is to ensure that costs across the mobile networks will be low enough to allow for a reasonably priced mobile TV offering.
Mohlala explained that with the 2010 Soccer World Cup on the horizon, bringing a TV service across the mobile networks is essential “If the prices are not corrected now, we won't have access to those services next year,” she added.
The department believes that while there is a valid debate by the operators with regards to interconnect, the actual cost only affects the wholesale side of the operators' business. Mohlala explained that consumers need to benefit now and the department plans to see the rate cut passed onto the retail market.
ICASA will be meeting with the mobile operators on Monday to ascertain their progress on rate cuts, however, the new directive, which could make the regulators old plans obsolete, will be tabled on Wednesday.
Related stories:
Operators defend interconnect fees
Interconnect rates to be cut
Parliament calls for interconnect debate
Share