The dispute between fixed-line giant Telkom and mobile operator MTN is rooted in Telkom's move into the mobile market, and its call for a higher termination rate on its new mobile network.
Telkom Mobile, expected to be operational before the end of the year, is calling for an interconnect rate of 93c per minute, while MTN insists on maintaining its 89c standard.
MTN is disputing the matter, arguing that Telkom's proposal would mean that Telkom would charge MTN 93c per minute to terminate on its network, but MTN would only be allowed to charge Telkom 89c per minute to mobile terminate calls.
With neither party able to come to an agreement on a rate going forward, the Independent Communications Authority of SA (ICASA) has stepped in, and the two parties met before the Complaints and Compliance Committee today to resolve the matter.
In the interim, MTN and Telkom have installed an agreement favouring a 89c interconnect rate, however, the agreement is subject to ICASA's final ruling on the matter.
Telkom has committed to introducing Telkom Mobile before the end of the year, and will move to resolve issues, such as interconnect disputes, as soon as possible in order to be in a position to open on schedule.
Interconnect limbo
Earlier this year, mobile operators Vodacom, MTN and Cell C, under pressure from ICASA, voluntarily dropped interconnect call termination rates to 89c per minute, from R1.25.
However, draft regulations have been tabled and are currently being reviewed by ICASA. Initially the draft regulations called for a rate cut to 65c a minute, from 1 July, to 50c in 2011, and to 40c from July 2012.
But industry stakeholders raised a multitude of concerns, mainly around the proposed glide-path of the interconnect rate decrease and how this may negatively affect their business.
To date, the authority has been in the process of reviewing these concerns, while the final regulations remain in limbo.
With no fixed regulations regarding mobile interconnect termination rates, the matter must go through the process outlined in terms of Section 37(4) of the Electronic Communications Act, which reads: In the case of unwillingness or inability of a licensee to negotiate or agree on the terms and conditions of interconnection, either party may notify the authority in writing and the authority may:
a) Impose the terms and conditions for interconnection consistent with this chapter;
b) Propose the terms and conditions consistent with this chapter which, subject to negotiations among parties, must be agreed to by the parties within such period as the authority may specify; or
c) Refer the dispute to the Complaints and Compliance Committee for resolution on an expedited basis in accordance with the procedures prescribed in terms of Section 38.
Legal war brewing
MTN's legal team today lashed out at Telkom, arguing that the fixed-line incumbent's complaints submission was littered with statements that can be factually disputed.
As such, the mobile operator called for the CCC to consider calling for proof of the statements made in Telkom's submission.
Telkom also bared its teeth, arguing that MTN was being disingenuous and that it was clear that the operator's accusations were geared towards obtaining an adjournment from the committee to “buy time”.
While both parties were prepared to present their cases today, the CCC has adjourned the hearings, subject to the submission of legal affidavits by Telkom and then MTN, in response.
It was agreed that Telkom must lodge its affidavit 13 September. MTN's responding affidavit must be then be submitted by 17 September. If Telkom then chooses, it can react to MTN's submission no later than Wednesday 22 September.
Both parties must submit their heads of argument by Thursday 23 September. The matter will then be heard by the CCC on 30 September and, if needs be, the hearing will continue on 2 October.
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