Government welcomes new mobile termination rates

South African Minister of Communications Yunus Carrim (image: SA Dept. of Communications)

South Africa’s Independent Communications Authority (ICASA) today revealed new termination rates between mobile operators in the country. Under the 2014 Call Termination Rates Regulations, mobile operators with more than 20% retail market share will be cut from 40c/minute to 20c/minute, while smaller operators will now pay only 20c.

South African Minister of Communications Yunus Carrim (image: SA Dept. of Communications)
South African Minister of Communications Yunus Carrim (image: SA Dept. of Communications)

“We welcome ICASA’s decisions and believe they serve the country’s interests. We would like to see these new rates contribute to consumers and business paying less to communicate and benefiting economic growth and job creation over time. The high costs to communicate have deterred global and domestic investment in this country,” said South Africa’s Minister of Communications Yunus Carrim.

“We understand that ICASA consulted extensively with all the parties and we feel that they should accept the outcomes. What some of them may lose in immediate profits will be exceeded by what they will gain in the medium and long term,” he added.

He added that it will assist the country in driving down prices and further the broadband policy. “The declining cost to communicate complements the goals of “SA Connect”, the country’s broadband policy, of bridging the digital divide by making broadband accessible and affordable.”

South Africa’s fixed line operator Telkom also welcomed the announcement. “Telkom welcomes the new Call Termination Rates (CTRs) issued by the Independent Communications Authority of South Africa (ICASA). The revised CTRs will substantially contribute to reducing the cost of communication and the consumer will be the biggest beneficiary,” it said in a statement.

Dr Miriam Altman, Head of Strategy at Telkom said she was encouraged by the introduction of the new Call Termination Rates.

“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,” said Altman.

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

The fixed termination rate for Telkom remains at 12c in respect of local interconnection for the coming year, while the rate for the national interconnections will fall from 19c to 16c.  By March 2017, the call termination rates for the major operators will be unified at 10c, with continued, albeit falling, asymmetry for small mobile and fixed operators.

Charlie Fripp – Consumer Tech editor