Both Vodacom and MTN saw the value of their stock drop yesterday, after the telecoms regulator proposed sweeping changes to interconnect rates.
Vodacom, which is expected to be hardest hit as more calls terminate on its network, lost 6.26%, to close at R116, a R7.74 decline. MTN's share price lost R6.10, or 3.06%, to end the day at R193.
The broader market dropped 0.46%.
The drop has been ascribed to the Independent Communications Authority of SA's (ICASA's) Friday afternoon announcement of lower mobile termination - or interconnect - rates.
ICASA has mooted a three-year sliding scale that will see the termination rates being cut by 50% next year to 20c. At the end of the period, in 2016, mobile termination rates will be at 10c.
Calls to fixed-lines will drop to 19c and then, eventually, 12c. This is the second round of interconnect cuts under ICASA's auspices.
The proposal is skewed in favour of the smaller players - Cell C and Telkom Mobile - which will benefit from asymmetry in that they will be paid more to terminate calls on their networks than what Vodacom and MTN will pay each other.
Asymmetrical rates will drop annually to meet the 2016 flat rate of 10c - starting from the current 44c high and dropping incrementally by between 4c and 7c each year.
Telkom, which will benefit from the proposed changes, saw its stock continue its upwards path, gaining 5.03% to add R1.27 and end the day at R26.50.
The slide in Vodacom's price affected the value of the state's investments by more than R1 billion yesterday, points out Vestact analyst Sasha Naryshkine. The government has a 13.9% - or R24.6 billion - stake in Vodacom, he notes.
Share