Telkom's mobile unit, 8ta, has been dealt its first blow after the communications regulator ruled against its bid to charge its competitors a higher fee to terminate calls on its network. But newly-published interconnect regulations have made the ruling a moot point.
Prior to its launch last year, 8ta lodged a complaint with the Independent Communications Authority of SA (ICASA), requesting that it be allowed to charge rivals Vodacom, MTN and Cell C 93c per minute to terminate on its network, instead of the proposed 89c.
The matter was heard as three separate issues, as 8ta lodged individual complaints against each of its competitors.
8ta argued that because it was a newcomer in a nearly saturated market, it was necessary for the authority to grant it permission to request an asymmetric rate from the incumbents to offset its go-to-market costs.
At the time, 8ta ensured that the special rate for which it was calling would be transitory, and be subject to time constraints decided by ICASA's Complaints and Compliance Committee (CCC).
However, the opposing operators argued that Telkom's dominance in the telecommunications industry and subsequent influence on its mobile arm could not be ignored. The operators, therefore, argued that 8ta could not be considered a newcomer and should not qualify for a special rate.
The CCC has since ruled on the matters individually and has dismissed all three of 8ta's calls for a preferential rate.
Telkom says it is studying all three judgments and evaluating its position in relation to the implications thereof for 8ta and the Telkom Group.
Back-up plan
For the most part, this would have translated into a serious setback for the newcomer. However, the mobile fledgling has been caught in a safety net, after ICASA published its call termination regulations late last year.
The regulations make provision for smaller players in the industry to apply for asymmetrical rates along the following guidelines: the operator must have less than 25% of the market, and faces higher costs than the current dominant players.
This leaves the door open for both Cell C and 8ta to request rates that are 20% higher after a planned rate cut this year, 15% higher than the rate between 2012 and 2013, and 10% higher from March 2013, which is the end of the glide period.
The regulations will see the rate drop from March to 73c at peak and 65c during off-peak times. The following year, rates will drop to 56c and 52c. However, by March 2013, wholesale mobile termination rates will drop to 40c.
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