The earnings of the biggest mobile operators, Vodacom and MTN could be severely impacted if the Independent Communications Authority of South Africa (Icasa) cuts \u201cmobile termination\u201d costs dramatically.<\/p>\n
This is according to a report in the Sunday Times, who noted that on Friday, after the market closed, the regulator issued a proposal to cut the cost of terminating a call from one network to another by 75%, phased in over three years.<\/p>\n
A termination rate is the money networks pay to each other for connecting a call.<\/p>\n
The current rate is about 40 cents a minute, but Icasa\u2019s draft plan proposes that this should be cut to 10 cents cents a minute within three years, having already reduced from R1.25 a minute in 2010.<\/p>\n
Icasa believes there is still \u201cineffective competition in the market\u201d.<\/p>\n
Though consumers, who have already seen call rates drop markedly over the past few years, could benefit, Icasa\u2019s proposals may spook investors in Vodacom and MTN when markets open on Monday, the Sunday paper noted.<\/p>\n
Telecom analyst Dobek Pater said termination fees in South Africa were quite high compared with those of other markets.<\/p>\n
\u201cIf the proposed three-year slide gets pushed through, it will bring the country more in line with the global average,\u201d he said.<\/p>\n
The Sunday Times \u00a0said that insiders believe that new Communications Minister Yunus Carrim has given Icasa the necessary muscle to make changes needed in the industry.<\/p>\n
Stakeholders would have 14 working days after the Government Gazette notice appears to submit written comments on the draft regulations. \u201cWe expect the final rates to be implemented by March,\u201d said Icasa spokesman Paseka Maleka.<\/p>\n
Icasa announces new draft call regulations<\/strong><\/a><\/p>\n New call termination rates coming<\/strong><\/a><\/p>\n New Icasa Cost to Communicate timelines<\/strong><\/a><\/p>\n Icasa tied up in settlement negotiations: report<\/strong><\/a><\/p>\n