ICASA must 'put its foot down'

The Independent Communications Authority of SA (ICASA) is being usurped by the mobile operators' move to cut the call termination rate next month.

SA's three operators - MTN, Vodacom and Cell C - have independently agreed among each other to cut the rates to 89c for peak calls from the first of next month. This will drop the interconnect rate by 36c a minute.

However, Independent Democrats leader Patricia de Lille says ICASA must put its foot down, and not agree to the cut until it has completed its own regulatory process under Chapter 10 of the Electronic Communications Act (ECA).

She argues that the move is nothing more than an attempt to sidestep the process, and put a rate cut in place before the authority can regulate new fees in June. “They are trying to pre-empt ICASA.”

But the operators say the new cut is voluntary and they are in full support of ICASA's regulatory process.

The operators had initially filed a proposal with ICASA that would see a glide path implemented, through which the rate would be cut to 80c in March 2012. But the original agreement had a clause that meant ICASA would not be able to regulate the rate until March 2013.

“This is wrong; the operators cannot prescribe to the regulator,” says De Lille. She says that, because the operators have been “arrogant” and did not keep to their agreement with communications minister Siphiwe Nyanda, ICASA should not accept the new proposal.

“The operators have displayed a lot of arrogance,” De Lille argues. She says they have shown they are willing to buck the law.

In addition, says De Lille, the fact that only the peak rate will be cut will harm millions of poor South Africans who only use their phones after hours. “They are really playing games with the country.”

Parliament has recommended the interconnect rate be cut to 60c, and ICASA has indicated that the operators' cost amount is 40c. De Lille says there is no reason why the rate cannot be cut aggressively, as is the case in Nigeria where MTN has a substantial operation.

She has called on the regulator to “put its foot down. ICASA doesn't have an option.”

The move by the cellular operators to drop rates before ICASA determines what the new rate will be in June is “voluntary”, says Robert Madzonga, acting chief corporate services officer at MTN SA.

In a statement issued yesterday by Vodacom CEO Pieter Uys, the company says “we fully support the ongoing regulatory process and trust that ICASA will swiftly finalise the regulations in this regard”.

Cell C CEO Lars Reichelt says the voluntary drop is “in the best interest of the consumer, and Cell C will do everything in its power to drive the market towards a flat and fair interconnect regime”.

The operator says there are two separate processes. The March reduction proposed by the operators is voluntary, and ICASA is proceeding to conclude the ECA required process that started in 2006 to determine a cost-based interconnection rate.

ICASA did not respond to requests for comment this morning, but yesterday chairman Paris Mashile said it was waiting for the submission of the agreements before making any further comment. However, ICASA yesterday welcomed any reductions on call termination rates or interconnection rates as long as there are no pre-conditions attached that seek to compromise the regulator's role and mandate.

Irnest Kaplan, MD of Kaplan Equity Analysts, says if the operators did not drop the rates, they might look bad in the public eye, and the companies had planned for a cut to 89c in March in any event.

Termination rates would have dropped anyway, says Kaplan. In addition, because ICASA had rejected the first proposal, there may have been a delay in the regulatory process of dropping interconnect.