Over a month after the Independent Communications Authority of SA (ICASA) announced new inter-network fees in a bid to bolster competition in telecoms, SA's four mobile operators are embroiled in a war of words.
MTN and Vodacom, which have both launched legal action against ICASA, have been censured by smaller operators Cell C and Telkom Mobile for opposing new termination rates that could see retail prices coming down.
The two leading operators, however, argue they are not against lower mobile termination rates (MTRs), but say they feel the regulator did not follow the correct procedure in reaching the new MTRs and asymmetry, which favours the two later entrants.
MTRs are the fees mobile operators pay each other to carry calls on their networks. The regulator's new regime - set to kick in from next month - will see Vodacom and MTN pay smaller players Cell C and Telkom Mobile 44c per minute, while the latter two will pay just 20c per minute. The current termination rate is 40c.
In line with ICASA's new termination regulations, a three-year glide path will see MTRs reach 40c for Cell C and Telkom Mobile, and 10c for the two dominant players in 2016. The aim is to have an across-the-board MTR of 10c by 2017.
'Let facts speak'
MTN SA CEO Zunaid Bulbulia is the latest to speak out strongly, in defence of MTN.
Telkom CEO Sipho Maseko yesterday questioned MTN and Vodacom's resistance to MTR changes in an open letter, published in the Sunday Times.
Maseko addressed the letter to Bulbulia and Vodacom CEO Shameel Joosub, saying the operators' opposition to new MTRs is "standing in the way of SA's future".
Bulbulia said in a statement to media that MTN would not be drawn into "a mud-slinging exercise", but urges its subscribers and SA's consumers to "let the facts speak for themselves".
He goes on to outline the operator's achievements and innovations over the past 20 years of its existence, saying MTN has driven down the costs of telecommunications over the years without compromising on the quality of its network.
Bulbulia says it is a misconception that MTRs directly affect retail pricing. "During the last decade, telecommunication retail prices have plunged 60% without any need for regulatory intervention on mobile termination rates.
"The mass adoption of mobile technology, which exceeded even the most ambitious forecasts, happened on the back of significant investment in infrastructure and distribution and was fuelled by innovative and cutting-edge products and solutions offered by industry players such as MTN."
Bulbulia says the second key issue behind its decision to challenge ICASA's new termination rate regulations, is asymmetry. "Given that there is no direct link between retail prices and MTRs, we cannot understand the justification for a proposed large asymmetry."
He notes the new termination rates proposed by ICASA will permit some operators to charge termination rates that are four times as high as the price charged by MTN for terminating calls on its network. "How overcharging the larger networks' subscribers to call smaller networks will deliver cheaper prices for all South Africans is something neither ICASA nor the recipient of the so-called 'asymmetry' has managed to explain."
Bulbulia says the "bizarre" outcome of the asymmetry is that the majority of South Africans on the two bigger networks now need to pay another tax to call someone on a smaller network. "The customers' reward for choosing the best is that you must subsidise the mediocre."
He concludes by urging South Africans to remember that "MTN is a proudly South African company that invests more than 80% of its profits back in SA for the benefit of all South Africans.
"As we celebrate the 20th anniversary of our hard-won freedom, think carefully who is best placed to ensure that South Africans continue to experience world-class ICT services."
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