Accept new termination rates: Carrim
Minister of Communications, Yunus Carrim, has welcomed Icasa’s new termination rate regulations, saying that the Ministry believes it will serve the country’s interests.
“We would like to see these new rates contribute to consumers and business paying less to communicate and benefitting economic growth and job creation over time,” Carrim said.
“The high costs to communicate have deterred global and domestic investment in this country.”
The minister said that these rates provide for greater competition which they expect to lead to reductions in the cost to communicate.
“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,” Carrim said.
The new regulations were also welcomed by Cell C and Telkom Mobile, the latter of which said it would deliver cost saving directly to consumers.
According to the new regulations released by Icasa, the call termination rate will drop to 20 cents from 1 March 2014, with a further drop to R0.15 in 2015, and R0.10 the following year.
The termination rates for small mobile operators like Cell C and Telkom Mobile, however, will remain asymmetrical, at R.044.
The asymmetry will have an adverse effect on the bottom line of larger operators like Vodacom and MTN, who will now effectively pay more than double to terminate on Cell C and Telkom Mobile’s networks.
“This prejudices Vodacom’s customers, and rewards those who have not invested in their networks at the expense of those who have,” said Vodacom CEO, Shameel Joosub.
“We will consider our options in order to do our best to protect our customers and ensure that South Africa continues to get the network investment that it needs and deserves.”
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