The Independent Communications Authority of SA (ICASA) is championing the cause of SA's consumers and moving on its promise to bring down the cost of communications in SA by presenting its views to the Parliamentary Portfolio Committee on Communications today.
This comes about two weeks after the authority introduced new mobile termination rates (MTRs) that strongly favour Cell C and Telkom Mobile in a bid to level the playing field - historically dominated by Vodacom and MTN - and promote competition.
The hearings are part of ICASA's Cost to Communicate programme, which it introduced in June as part of a drive to streamline regulations and bring down the cost of communications for SA's consumers.
Presenting the programme last year, ICASA's GM of markets and competition, Pieter Grootes, said: "Come April 2014, we will have defined all the markets along the value chain and the relevant remedies to ensure that the chain works. Come 2014, [SA] can expect a lot for those deploying infrastructure and for infrastructure players."
ICASA's Cost to Communicate programme lays out deadlines for final regulations on broadband administration, MTRs, local loop unbundling and digital TV - ranging from 25 October last year for a reassessment of termination rates, to 8 May this year for the publication of final digital TV regulations.
MTR divide
ICASA says it will today discuss its recent determinations on wholesale call termination rates (the fees operators pay to carry calls on each other's networks) and "the necessity for the regulated rate of mobile and fixed termination rates, as well as the rights for smaller networks to charge asymmetric termination rates".
It is expected that both Vodacom and MTN will contest ICASA's proposed asymmetrical rates that will see the two pay their smaller counterparts four times the MTRs they receive in 2016 (40c). However, the authority maintains its position that asymmetric termination rates at the regulated levels are necessary to foster infrastructure-based competition.
Last week, Vodacom CEO Shameel Joosub said the new MTRs could have an impact of up to R1 billion in the 2015 financial year for the company. In the operator's Q3 trading statement it says: "[Vodacom has] concerns about the process used to determine these published rates. We intend to challenge the legal validity of the process."
MTN SA CEO Zunaid Bulbulia says MTN does not support the proposed mobile asymmetrical rates, which he refers to as "competitive cross-subsidies", and adds the operator believes them to be unsubstantiated. "MTN will also have to scrutinise and consider a number of other due process concerns once the regulation is published."
Credit rating firm Moody's has said the new MTR structure could have adverse effects for South Africans, in that the charge changes could curb Vodacom and MTN's future capital expenditure plans. "[This] could erode their competitive advantage in terms of service quality and result in a slower rollout of better technologies."
ICASA says it recognises the importance of providing surety to all stakeholders on the future of termination rates in SA, and believes a rate of 10c in 2016 sets a floor price that ensures efficiencies in networks. "Lowering of rates will stimulate innovation and competition, and ultimately, will result in lower call charges for the consumers."
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