Mobile

Cell C to challenge termination rates

Staff Writer

 ·30 Sep 2014

Cell C CEO, Jose Dos Santos says that the group is likely to challenge the new call termination regulations in a legal capacity.

The Independent Communications Authority of South Africa (Icasa) announced its new call termination regulations on Monday, 29 September 2014.

According to Dos Santos, the new regulations do not promote competition but help the dominant players, namely MTN and Vodacom, to entrench their market position.

“We aren’t left with too much choice but to see this as a legal challenge,” Dos Santos said at the MyBroadband 2014 conference in Midrand on Tuesday (30 September).

He said that, while the group was still looking at its options, a legal route is the most likely outcome over the coming days.

This comes after Icasa announced a draft version of the regulations on 4 September (which was published on 9 September) and gave stakeholders until 19 September to comment before finalising them.

The reason for the urgency is due to a 31 March 2014 High Court ruling which declared Icasa’s previous regulations unlawful and invalid.

A suspending of the declaration of invalidity for 6 months gave Icasa until the end of September to produce new regulations.

Call termination rates are the fees telecommunications operators charge each other to connect calls to one another’s networks.

Call termination rates in South Africa are split into two broad categories: termination to a mobile location (when placing calls to a cellular network) and termination to a fixed location.

Icasa’s new mobile termination rates are summarised in the table below, and compared against what they would have been had they not been struck down by the High Court.

The criteria for determining which operators qualify for the asymmetric rates remains the same as in the draft regulations, Icasa said.

Instead of using market share (which had to be under 25% to qualify previously), the new regulations looks at total terminated minutes. For an operator to qualify for asymmetry it must have less than 20% of the share of total terminated minutes in either the fixed or mobile market.

Cell C previously expressed its displeasure at Icasa’s draft mobile termination rates, saying that the regulator had proposed “a complete U-turn” on its previous regulations.

The mobile network also said that Icasa was effectively acknowledging that “the duopoly that exists in the South African market today is an acceptable state of affairs and will be allowed to continue.”

Mobile termination rates only form part of the regulations, and Icasa also finalised a number of changes to fixed-line rates, as shown in the table below.

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