In defiance of the regulator's decision not to allow planned interconnect rate cuts, mobile operators Vodacom, MTN and Cell C will go ahead with their proposals to lower rates in March.
Despite the move, Vodacom CEO Pieter Uys says the operator is doing the right thing. “We do not believe that the debate around glide paths, or the formal regulatory process, should delay the reduction in interconnection rates.”
The company says it will drop its rate to the initial 89c per minute during peak times. The company also says it is working with the Independent Communications Authority of SA (ICASA) to achieve this rate cut.
Cell C's new CEO, Lars Reichelt, will join the move to drop interconnect rates. “In the interest of consumers and the country, Cell C is committed to the lowering of interconnection rates by 1 March 2010. We are actively engaging the relevant parties, including the Department of Communications (DOC), ICASA and our fellow operators.”
MTN will also drop its rates, says Graham de Vries, MTN SA GM for regulatory affairs, adding that there is still work that needs to be done. “We are still finalising how we can drop rates next month and still follow the regulatory requirements.”
He adds that the CEOs of all three companies are in bilateral discussions to negotiate the best way forward. ICASA has also been brought in to MTN's discussions so the company can work out how best to accommodate the regulator's request.
The planned rate cuts form part of an agreement made last year between the operators and the DOC, which would have seen all the operators drop rates by next month. However, in a dramatic turn of events, ICASA this week decided not to review the submissions made by the operators.
ICASA said the agreements submitted included a clause that would prevent it from regulating interconnect for the next three years, effectively making it powerless to do its job.
The regulator's decision has been supported by its political counterparts, including high-level members of the Parliamentary Portfolio Committee on Communications and minister of communications Siphiwe Nyanda.
It has also been supported by local alternative telco ECN, which has spearheaded the campaign to have interconnect rates dropped. CEO John Holdsworth says: “ECN unequivocally supports ICASA's decision not to endorse the mobile operators' seemingly collusive agreement on a peak rate of 89c. The mobile networks' outrageous bid to bind the authority to an undertaking not to review interconnection rates until 2013 beggars belief.”
All three operators are being investigated by the Competition Commission on whether the interconnect agreement they have made can be considered collusive.
The hearings, and the investigation, are expected to be dealt with in the first half of the year, possibly bringing to an end an almost six-year-long probe into the mobile industry. The matter could also be referred to the Competition Tribunal if the investigation merits a penalty.
Despite the widespread support of ICASA, Vodacom and Cell C will go ahead and drop their rates. However, both companies have indicated the rate cut will be worked out with the regulator.
“We also fully support the ongoing regulatory process and trust that ICASA will swiftly finalise the regulations in this regard,” explains Uys.
Share
