A second set of meetings, which intended to bring the interconnect debate to an amicable end, has broken down.
The meeting was held by the Independent Communications Authority of SA (ICASA) this morning in an attempt to persuade mobile operators to reduce the mobile termination rates. However, the regulator says the mobile operators brought nothing to the table and refused to disclose any information to ICASA on the cost of actual rates.
In a statement released this afternoon, ICASA said: "After deliberations, the Authority noted that mobile operators had nothing to put on the table as they could not come up with an agreed mobile termination rate amongst themselves. As a matter of fact, Vodacom and MTN refused to disclose their bilateral mobile termination rate agreement at the meeting."
The regulator says that since discussions have broken down and not yielded a result, it will pursue other avenues to drop the interconnect rates. "The authority will nevertheless continue with its regulatory processes of developing a framework for competition and cost-based pricing in the voice market as set out in Chapter 10 of the Electronic Communications Act (ECA)."
In a strongly worded statement, the authority has declared the mobile operators to have significant market power, and implied that they are acting uncompetitively. The statement goes on to say the operators will now be subject to competition regulation, specifically when it comes to the mobile termination rates.
"The other supplementary regulatory processes that the Authority is to embark upon are: assessing the competitiveness or anti-competitiveness of the market; and imposing pro-competitive remedies, including cost based pricing."
The regulator says the process will be concluded by the end of its financial year, which is March 2010. However, the Department of Communications may speed up the process and have the rates cut by before December.
Meanwhile, the Parliamentary Portfolio Committee on Communications is in the process of drawing up its draft reccommendation on interconnect, which will could get interconnect to as low as 60c by December and will be followed by 15c cuts every year until 2012.
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