Third mobile operator Cell C argues that its weak position in the market should disqualify it from 8ta's calls for an asymmetrical interconnect rate.
Cell C yesterday hit back at 8ta's claims that it had a split personality for reversing its position on asymmetrical rates, arguing that it supported and understood the newcomer's justification for the request.
However, Cell C's support of 8ta's request extends only to an asymmetrical rate being imposed on bigger mobile players, MTN and Vodacom. The operator argued that its market share of 10% paled in comparison to Vodacom and MTN.
The two mobile operators are caught in an interconnect standoff as 8ta proposes a rate of 93c per minute, while Cell C seeks a rate of 89c.
The Independent Communications Authority of SA (ICASA) has since intervened in the matter and referred the dispute to its Complaints and Compliance Commission (CCC), which yesterday heard arguments from both sides. 8ta is in similar disputes with MTN and Vodacom.
In the interim, Cell C and Telkom have installed an agreement favouring an 89c interconnect rate; however, the agreement is subject to ICASA's final ruling on the matter.
Cell C hopes that its market status will exempt it from being forced into an asymmetrical agreement with 8ta. “Cell C's position in the market is fundamentally different to that of MTN and Vodacom,” argued Cell C's legal team.
But 8ta had previously noted that nine years of existence in the industry, coupled with a 10% market share, means Cell C has been defined as an established market player.
Denying status
Cell C earlier this year objected to ICASA's classification that is an established and significant market player (SMP).
Cell C argued that the criteria being used was arbitrary and legally incorrect, because - despite having the required market share - the operator does not have pricing power, either in the wholesale market or in the retail interconnect market.
ICASA hit back, saying the Electronic Communications Act requires the authority to define relevant markets and identify the players' SMP status so as to impose appropriate pro-competitive remedies.
“We have made a determination that everybody has significant market power on their networks in terms of terminating calls, and as a result, everyone should be subject to pro-competitive measures,” noted the authority.
“However, we came to the conclusion that it is not everyone who is in a position to exercise market power so we made that differentiation in the market share criteria,” conceded ICASA.
More in common
Cell C's legal team criticised 8ta's calls for the same degree of asymmetry from all three mobile players, saying it is not in the same position as Vodacom and MTN. “The four cents which Telkom Mobile seeks does not mean the same for all of us,” argued Cell C.
Instead, the operator argued that, based on its current market position, it is closer in comparison to 8ta than the other two players.
Based on its significantly smaller subscribership scale, Cell C's legal team argued that its interconnection costs would likely be closer to that of 8ta's than to the other two players.
Cell C called on the newcomer to justify and prove that 8ta's costs are significantly different to that of Cell C.
The operator also highlighted that for the past nine years it had been unsuccessful in obtaining an asymmetrical rate in the market. Cell C criticised the authority for its current position, arguing that it was the failure of the regulator to impose asymmetry that contributed to its small position in the market.
Based on this position, the operator suggested that if an asymmetrical rate is to be enforced that a smaller rate be considered for Cell C.
The CCC has 90 days within which to make a ruling on the dispute.
Related story:
Cell C denies established status
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