The Parliamentary Portfolio Committee on Communications has invited written submissions from the public on ways to reduce interconnection rates and the high costs of telecommunications in SA.
Interested individuals and interest groups, who wish to comment on the issue, have until noon on 2 October to do so, and the committee will invite selected stakeholders to address it on 13 and 14 October.
The committee believes interconnection rates of R1.25 a minute, during peak times, are “exorbitant and excessive” and lead to “extremely” high telecommunication costs.
It says these high rates are a consequence of “apparent historical collusion between dominant mobile operators in the country, which has placed profits and greed above people”. The committee also argues that the Independent Communications Authority of SA (ICASA) is incapable of effectively regulating the issue.
However, earlier this month, ICASA said mobile operators had agreed to drop the termination rates by the beginning of February 2010.
A report released after a meeting between ICASA, operators and the Internet Service Providers' Association indicates that operators will start a process that will see lower interconnect rates.
Operators will, as a consequence of the report, start implementing a new way of negotiating interconnection rates. The negotiations will have to also incorporate aspects of competition law.
New contract agreements will be in place by the end of December, with full implementation of the new rates as soon as February next year.
Hardest hit
“There is unanimity in industry, government, other relevant stakeholders and the regulatory authority that the present situation is socially indefensible and economically unjustifiable,” it notes.
Written submissions must address the committee's proposal that mobile and telecoms operators drop the interconnection rates with effect from 1 November to 60c a minute during peak times.
In addition, the committee also wants rates to be trimmed by 15c a year, until 2012, in the hope of reducing the costs of telecommunications.
Heated debate
However, last week mobile operators expressed concerns that cutting the rates could destabilise the market or damage them financially.
Their statements came on the back of a Parliamentary Portfolio Committee on Communications meeting, where operators were lambasted for high local interconnect rates.
Vodacom CEO Pieter Uys has called on ICASA to approach the matter with caution, so that no harm is done to mobile companies' financial stability.
“This would simply reduce the extent of competition in the industry and discourage investment in telecommunications infrastructure, which - in the context of SA - generally benefits the poor and marginalised as borne out by the 110% mobile telephony penetration level achieved since the advent of mobile 15 years ago,” he says.
Uys has also claimed that dropping the rates would harm it more than the other operators, and he would rather see a gradual reduction in rates over time.
MTN has declined to provide any details on its stance on the matter, saying only: “This resolution will now be reviewed internally.”
Cell C's executive head of regulatory affairs, Nadia Bulbulia, says it has been fighting for lower interconnect since it entered the market eight years ago.
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