So where's my Christmas box?

There is nothing worse than raising expectations and then dashing them. It leaves a bitter taste in the recipient's mouth and essentially breaks the bonds of trust that are not easily repaired.

Yesterday's announcement, regarding communications minister Siphiwe Nyanda's “Christmas and Easter boxes” on cellular interconnection rates, was not news, it was no victory, and it will cause irreparable harm between government, the public and the cellular network operators.

If anything, the minister's speech was a pyrrhic victory, as another statement like that by him and he will be totally undone. Because, reading the statement carefully, one can see that no agreement has been reached, there is no drop in the retail rate, there will be no relief for consumers during the holiday season, and the processes that are under way will continue until they eventually reach some kind of conclusion.

What tells me that no agreement has been reached is that there is no way on this green earth that two of the major network operators will allow a third to have a month's revenue advantage over them. Saying Cell C and Vodacom will introduce the new interconnection rate by 1 February and MTN by 1 March gives the latter a month's grace in which to continue to collect the higher rate. No way does business hand its competitors free revenue willingly.

There is no drop in the retail rate, and that is the rate that consumers actually care about.

Paul Vecchiatto, Cape Town correspondent, ITWeb

There is no drop in the retail rate, and that is the rate that consumers actually care about. The 34c cut in the interconnection rate to 89c per minute during peak hours is very close to the rate proposed by Vodacom and MTN last month and they had already agreed to it. Cell C didn't because it wants flat rates for all hours and a different tariff regime. It was also very close to the rates proposed to ICASA by the network operators three years ago.

Another thing: most calls are made during off-peak hours during the December holidays, but that rate is totally unaffected so there is no relief for consumers during those times. Some Christmas box!

ICASA is the regulator and the Ministry of Communications and Parliament do not have the powers or the mandate to regulate the sector. If they are not happy with ICASA's performance, they should fire it and rejuvenate the institution, but not try to interfere and regulate.

So, for the time being, ICASA will continue with its process of drafting interconnect regulations as detailed within Chapter 10 of the Electronic Communications Act, and it has made a public commitment to Parliament that it will have this completed by June next year.

Yes, ICASA is a problematic institution. It is slow, under-resourced and there have been a lot of questions raised about the behaviour of some of its councillors and staff. But it is the regulator and it must be allowed to do its job.

The Department of Communications and Parliament must ply their oversight roles properly by monitoring and conducting public hearings into its performance. However, neither should try to usurp ICASA's role as this means the law is ignored and this leads to anarchy, which is most definitely not good for investment or business.

It was interesting to watch the political parties' immediate reaction yesterday after the minister's announcement.

It is difficult to criticise an announcement that talks about a rate cut. However, if one reads Ismail Vadi's (ANC MP and chairperson of the communications committee) statement carefully, his welcome is somewhat lukewarm. He carefully pointed out that the value of the recent hearings and the DOC's intervention was that they raised public awareness.

Niekki van den Berg, of the Democratic Alliance, essentially asked: “What is this?” It was obvious that he was not totally convinced by the news. Juli Killian, of the Congress of the People, basically asked the minister not to regulate, but welcomed the statement as a small victory.

Patricia de Lille, leader of the Independent Democrats, celebrated the statement as a victory. And herein lies the rub. It was De Lille, an experienced politician, who raised the issue in a succinct manner with Parliament and the public. Unfortunately, she over-simplified it to such an extent that it has become impossible to resolve immediately and these little “victories” are all that are gained.

The other political parties are also to blame as they should have questioned her more thoroughly about her knowledge of the industry, and the fact that her assertions were made based on only one market study conducted by someone who lives outside the country.

So the situation is this: if all the parties to this debate had done their homework properly, we would not be having a situation of “The emperor is wearing no clothes”. We would have realistic expectations that could be met and the public would have continued trust in our public institutions and business would not feel under threat.

Related story:
Interconnect rates down to 89c