We want to reduce prices: MTN

 ·14 Feb 2014
MTN business

MTN says that its High Court application to set aside the call termination rate cuts being implemented by industry watchdog, Icasa, should not be seen as an attempt to keep call costs high.

MTN has filed an application at the High Court, seeking to get the new rates set aside.

The mobile operator is also seeking an urgent interdict to stop the Independent Communications Authority of South Africa (Icasa) from implementing the rate cuts on 1 March 2014.

Icasa released its “Call Termination Regulations, 2014” on 29 January 2014, which will see mobile termination rates (MTR) reduced from the current 40 cents per minute to 10 cents per minute over the next three years.

The regulations further call for significant asymmetry, up from the current 10% to 120% from March 2014, 180% from March 2015, and 300% from March 2016.

These regulations will benefit Telkom and Cell C, but will cost Vodacom and MTN hundreds of millions of rands in lost revenue.

“Regulation of this kind is sometimes necessary but only if due process is followed and it does not result in uncertainty and unnecessary interference with existing effective competition,” MTN SA CEO, Zunaid Bulbulia said in a statement.

The operator said that it believes the decline in Mobile Termination Rates (MTRs) must be driven by a fair process and appropriate costing study ensuring they are reflective of the costs incurred by all players in the market, including smaller players.

In its court application, MTN asked the Court to review and set aside parts of the regulations which it finds are irregular.

MTN said that there is a common goal in the industry to reduce costs and to promote fair competition, as both of these things are good for customers and for business.

However, Bulbulia insisted that the goal had to be realised in a “proper and commercially sustainable” way.

“MTN’s decision to take the legal route should not, in any way, be construed as an attempt to keep the costs of telecommunications high as has been inferred in certain quarters,” Bulbulia said.

More on termination rates

MTN makes good on legal threats against Icasa

MTN calls for termination rate cuts to be scrapped

MTN, Vodacom sink on rate cuts

Telkom to pass on CTR cuts to consumers

Vodacom: Consumers won’t benefit from MTR cuts

Drastic call termination cuts announced

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