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De Lille wants interconnection law

Paul Vecchiatto
By Paul Vecchiatto, ITWeb Cape Town correspondent
Johannesburg, 23 Jul 2009

Independent Democrats party leader Patricia de Lille plans to propose a private members Bill in Parliament to resolve the interconnection issue that she claims has led to the high cost of mobile phone calls.

A private members Bill is a draft law proposed by a member of Parliament who is not part of the governing party. Apart from being her party's leader, De Lille is also a member of the Parliamentary Portfolio Committee on Communications, the body that has legislative oversight of the Department of Communications and the sector.

De Lille said this yesterday, after announcing that she had laid a complaint with the Competition Commission over the high cost of mobile phone calls, and to investigate if the dominant players are acting anti-competitively or are guilty of prohibited practices.

“We have been working on this issue for over a year now and I originally wanted to lay the complaint in April, but, unfortunately, the general elections and other issues took priority then,” she said.

In her complaint, De Lille asserts that SA has some of the highest mobile telephone costs in the world, and that she believes there are sufficient “alarming markers to warrant an urgent investigation by the Competition Commission...”.

Eight points

Among the eight main points in her letter, De Lille says SA is the least competitive among its peer group of countries and that, while the country has a high penetration rate of handsets, it has a low monthly usage (directly related to the high cost of calls).

She also asserts that interconnection rates increased by 500% over 12 years until 2007, and that they had surged by 512% in the period from 1998 to 2001.

De Lille says her numbers come from research carried out by a South African-born Oxford University researcher who did a similar report about the high cost of UK mobile phone calls compared to those in Europe.

“The UK successfully introduced legislation to remedy their high interconnection costs, and I think that it is time that the South African Parliament does the same,” she said.

The Competition Commission has confirmed it has received De Lille's complaint and it will investigate the matter.

Waiting list

The commission sent ITWeb a list of competition complaints it is currently investigating against the mobile telephone operators, although no indication was given as to when they will be resolved.

Among the complaints is one by Naidoo/Reyneke against MTN, Vodacom and Cell C over call termination charges; the South African Value Added Network Association against Telkom; and five other complaints against Telkom by its Internet services rivals concerning excessive pricing and margin squeeze.

Frost & Sullivan analyst Lindsey McDonald says De Lille's private members Bill could be a more resolute way to solve the interconnection issue than other remedies that have been tried in the past.

“ICASA (the telecoms regulator) has been trying this for some time, but has not solved the issue,” she says.

Dominic Cull, of Ellipsis Regulatory Solutions, says: “This is political will stuff. The problem is that ICASA approved the increase in the interconnection rate from 25c to 125c, and so, what change to that a private members Bill will make is uncertain. However, anything that drags the issue into the public domain must be welcomed.”

None of the mobile operators had responded to De Lille's assertions at the time of publication.

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