MTRs should be at 10c to 15c: Holdsworth

Mobile termination rates should be as low as 10 cents to 15 cents according to John Holdsworth, AppChat founder and CEO.

Mobile termination rates dropped to R0.40 on 01 March 2013, the third cut since the Wholesale Voice Call Termination Regulations were published in 2010.

Glide path for termination to a mobile location
Date Peak Off-peak
01 March 2011 R0.73 R0.65
01 March 2012 R0.56 R0.52
01 March 2013 R0.40 R0.40

Speaking at the 8th annual Broadband Summit in Fourways this week, Holdsworth said: “I still think we copped out on 40 cents…I still think 25 (cents) is too high. If I look at what’s happening to interconnect rates in the UK and some of the other countries, it’s probably somewhere down to between 10 and 15 cents.”

“We need to reduce termination rates, not necessarily just mobile termination rates, but termination rates across the board. I’d like to see them at somewhere between 10 and 15 cents…that’s probably the correct figure.

The Independent Communications Authority of South Africa (ICASA) said it sees no reason why mobile termination rates should not be in the region of R0.15 to R0.25, based on benchmarks set by South Africa’s peers in Africa and the rest of the world.

“It is also conceivable that termination rates should tend towards zero over time. The upcoming market review will address the above issues,” the Authority said.

A fourth mobile player in SA

Holdsworth also weighed in on the “how many is too many” debate, in terms of mobile operators in SA.

“It is possible for a new entrant to enter the market and have a dramatic result,” Holdsworth said, noting the success of Free Mobile, a mobile network which launched in France in 2012.

Holdsworth noted that Free Mobile picked up more than five million subscribers in its first year of operation, equivalent to 8% of a mature mobile market. “If you get your value proposition right, you will be successful,” he said.

Telkom perplexed industry this week when it announced the launch of Telkom Mobile – relegating its 8ta brand, which launched in 2010 as the country’s fourth mobile player, downgraded to a “sub-brand”.

In interim results for the six months ended 30 September 2012, Telkom said its mobile arm reached approximately 1.5 million active subscribers, despite being in operation for 23 months.

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MTRs should be at 10c to 15c: Holdsworth