SA telecoms regulator sets new connection fee

SOUTH Africa’s telecoms regulator would meet with network operators again on Friday next week to finalise the new interconnection rate proposals, with the final rate likely to be 60c a call.

The Independent Communications Authority of SA (Icasa) on Monday met with Neotel, MTN, Vodacom, Telkom, Cell C, and the Internet Service Providers Association, following last month’s meeting that resulted in the parties agreeing to reduce interconnection rates by February next year.
Cellular operators pay each other N$1,25 to carry calls on each other’s networks.
According to Icasa, the interconnection fee cannot be more than 50 per cent above the cost of providing the service.The Department of Communications has brought forward the implementation of the new rate to next month from the February deadline agreed with Icasa. The department is expected to issue a policy directive to Icasa this week.
Analysts said next month’s deadline was unlikely to be met, as Icasa had to follow the required process of allowing 30 days for public comment and thereafter it would need ample time to finalise the regulations.
However, other analysts said this was an emergency process and it was unlikely that the operators would take legal action considering the public outcry.
World Wide Worx managing director Arthur Goldstuck said part of the directive should be the requirement that networks lay open the structure of their costs, so that there was both transparency in call costs and honesty in how consumers were charged for calls. ‘Without this transparency, it will be very difficult to enforce a cut in the interconnect across all calls between networks,’ he said.
Asked how the government would ensure that the reduction in interconnect fees was passed on to consumers, communications ministry spokesperson Tiyani Rikhotso said the entirety of the package would have to suit all people involved.’The government would like to see whatever change is made having an impact on consumers. It should provide a reprieve to consumers.’Vodacom chief executive Pieter Uys said last month that the company was not against the reduction of termination rates. ‘But Icasa would have to apply its mind in such a manner that they do not financially damage any operator by their ruling,’ Uys said. ‘This would simply reduce the extent of competition in the industry and discourage investment in telecommunications infrastructure, which in the context of South Africa generally benefits the poor and marginalised as borne out by the 110 per cent mobile telephony penetration level achieved since the advent of mobile 15 years ago.’He added that international best practice had been to reduce mobile terminating rates over a period of time to avoid business model shocks and prevent the scramble by operators for lucrative customers at the expense of the poor and marginalised communities. The regulator would have to determine such a ‘glide path’, Uys said. – Business Report