The Independent Communications Authority of SA (ICASA) has confirmed it was never part of discussions between communications minister Siphiwe Nyanda and the mobile operators on interconnect reductions.
The regulator has also confirmed the glide path presented to ICASA did not represent the promised blended rate of 77c announced by the minister to Cabinet last year.
The regulator this week refused to review amended interconnect agreements between the operators that could have seen a reduction in consumer mobile calls as early as next month. ICASA's decision has left many in the industry questioning its timing; however, analysts say that if ICASA was left out of the initial discussions, it is no surprise that it has put its foot down now.
The newly-submitted agreements stem from intensive discussions last year between the operators and Nyanda. This followed an outcry by the Parliamentary Portfolio Committee on Communications and Independent Democrats leader Patricia de Lille over the high cost of communication in SA.
However, ICASA confirmed this morning that it had no part in the decisions made and presented to Cabinet at the end of last year.
The regulator says, despite the agreements made, it is not prepared to bend on the matter, specifically since the new agreements include a clause that could prevent ICASA from regulating interconnection for the next three years.
It also says the operators have proposed a glide path that scandalised the industry last year, when a letter from MTN to several other operators revealed the blended rate of 77c would not be reached in three years.
Not good enough
ICASA says the rates that have been proposed are exactly the same as those in the MTN proposal to other telcos. They are: 89c a minute during peak times from March this year, dropping to 85c in October 2011 and again to 80c in October 2012.
Kaplan Equity Analysts MD Irnest Kaplan says the regulator's decision comes as no surprise, specifically since it was not consulted during the process. “They must have known what was happening and probably should have asked to be consulted,” he adds.
Despite ICASA's non-attendance, Kaplan says it has always been up to ICASA to stipulate the rate cuts. “Interconnection regulation has always been rightfully regulated by ICASA; the question is, does the DOC have the right to intervene?” he notes.
Absa Investment analyst Chris Gilmour says the regulator may have been left out of the process intentionally. “ICASA has become well known for taking its time with issues. The department and the political parties wanted to have a speedy decision on the matter.”
He says the department's decision proves that “democracy, with a small d, is alive and well. It shows that ICASA is not prepared to be bulldozed into an agreement, even if it was agreed to by the minister and the operators.”
Crisis control
Even though many have agreed that ICASA's decision will allow it to keep the power to regulate the industry, Kaplan says it has brought uncertainty to the sector when it most needs to have certainty.
With companies already planning products and services around the proposed rate cut, and others which have already cut their own rates, there will be a level of crisis control now. However, Kaplan says it may not yet be a train smash.
He says it all depends on whether the industry now allows ICASA to regulate interconnect, according to its mandate in the Electronic Communications Act.
ICASA says the draft regulations will be published this month and hopefully the full regulations will be implemented by June. “If the regulations are a few months out, it won't be so bad. But if the regulations are delayed for a much longer period, which could happen if the operators fight them, then it will be problematic,” comments Kaplan.
The DOC has not yet responded to ITWeb's query as to what it plans to do now that the agreement it made with operators will not be accepted by ICASA. However, it has indicated it will release a statement later today.
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