ICASA sets in motion plans to reduce costs to communicate

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 22 Mar 2024
Voice call termination is the service that one network offers another.
Voice call termination is the service that one network offers another.

The Independent Communications Authority of South Africa (ICASA) today published the draft amendments to the Call Termination Regulations, of 2014 and 2018, for public comment.

Voice call termination is the service that one network offers another to carry voice traffic to its end-users.

The charge for this service has been the subject of concern, where it has been viewed as a constraint to effective competition as well as a driver of high retail prices of telecommunications in South Africa.

The telecoms regulator notes these regulations are part of the broader measures to reduce the cost to communicate and are intended to be applicable from 1 July 2024.

In a statement, the regulator says these draft amendments mark the penultimate step in a process that began with the authority’s 2021 decision to review the existing call termination rates.

The central feature of the draft regulations sees a substantial reduction in wholesale voice call termination rates charged, as follows:

Source: ICASA.
Source: ICASA.

According to the regulator, these draft rates emanate from an intensive cost-modelling process involving the development of an iterative, multi-input, bottom-up cost model, accompanied by extensive engagement with the main voice operators.

It notes the central feature of this cost model has been the adoption of a long-run incremental cost approach in line with global international good practice.

The outcome of this consultative process has allowed the authority to deduce the appropriate cost levels of wholesale voice call termination services, and therefore to specify what operators should be able to charge.

The regulator adds that another central feature of the above rates is the phasing out of asymmetry between what large and small mobile operators can charge, in accordance with the decision set out in the authority’s 2022 findings document.

New entrants into the voice services market will, however, qualify for asymmetry for a limited period of three years after entry into the market, it adds.

Lastly, ICASA points out that all operators may charge reciprocal international termination rates for voice calls originating outside of SA.

It explains that the international termination rates charged by an operator must not be less than the South African termination rates as set out above, or higher than the termination rate charged by the respective international operator.

"In creating a more competitive and consumer-friendly telecommunications landscape, ICASA takes a significant stride with the publication of draft amendments to the Call Termination Regulations. By phasing out asymmetry and providing a transitionary period for new entrants, we aim to empower operators to adapt gradually, all while maximising benefits for consumers,” says ICASA council committee chairperson Nompucuko Nontombana.

“The authority is confident these wholesale voice call termination rates will not only meet the objectives of the ECA [Electronic Communications Act] but also pave the way for a more dynamic and consumer-centric telecommunications market,” adds Nontombana.

The authority believes the wholesale voice call termination rates set out in the draft regulations will aid in transitioning the market towards a more competitive landscape as contemplated in the objectives of the 2005 ECA.