High call charges: South African telcos weigh in

January 30, 2014 • Mobile and Telecoms, Southern Africa, Top Stories

Cell C has welcomed ICASA's announcement of new Call Termination Rates. (Image source: Leading Architecture)

Cell C has welcomed ICASA’s announcement of new Call Termination Rates. (Image source: Leading Architecture)

Certain service providers within South Africa’s telecommunication industry have voiced their approval of the announcement of new Call Termination Rates by the Independent Communications Authority of South Africa (ICASA).

On 29 January the regulatory body issued an announcement of changes to the fees one network charges another for calls received or terminated on its network.

Following notification from ICASA, the incumbent mobile cellular operators are expected to reduce their Mobile Termination Rate (MTR) from 40c to 20c as of 1 March 2014. The MTR’s for small mobile operators will remain at 44c.

Mobile operator Cell C welcomed the announcement and believes the move will “promote and foster a more balanced and competitive mobile industry to the benefit of consumers.”

ICASA’s decision was reportedly based on the need to reduce the high cost of communications, to act in the public interest and incentivise investment.

“This comes as a relief to Cell C as we have over the last 18 months committed ourselves to leading price competition even at the expense of our own margins, while motivating to ICASA for pro-competitive relief. Without this intervention it was likely that the South African market would have continued to have been an effective duopoly to the detriment of the consumer, industry and the South African economy. With the support of this regulation, the mobile market will continue to become more competitive on a sustainable basis,” said Cell C Acting CEO Jose Dos Santos in a statement to the media.

“ICASA has made a decisive and positive move in publishing these regulations, which we believe is another critical step in levelling the SA telecoms market,” he added.

Telkom SA has also voiced its approval of the announcement saying the revised CTRs will contribute towards reducing the cost of communication to the benefit of the consumer.

Dr Miriam Altman, Head of Strategy at Telkom SA, said, “This brings the market closer to parity in termination rates, supporting the move to convergence between fixed and mobile services. Telkom has for many years subsidised the dominant mobile operators, and this move will begin to level the playing field. Telkom will pass on reductions to consumers and will communicate these savings once it has fully assessed the impact of the regulations.”

Chris Tredger – Online Editor

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