Cell rates to drop soon - ICASA

Tuesday, February 16, 2010

Cape Town - The Independent Communications Authority of SA (ICASA) is confident that the issue of reduction in interconnection fees by mobile operators will be finalised by June to allow cellphone users to enjoy cheaper rates.

Briefing Parliament's Portfolio Committee on Communications on Tuesday, ICASA confirmed that it had agreed to a revised agreement on interconnection fees submitted to the authority by mobile operators.

ICASA rejected an earlier agreement from the operators which it said sought to force the authority into agreeing not to begin setting the rates until at least 2013.

Interconnection rates are the fees the mobile operators charge each other and other network operators to carry calls onto their networks. These are currently set at around R1.25 per minute during peak calling times.

Earlier this year, MTN, Vodacom and Cell C agreed after intense discussions with Communications Minister Siphiwe Nyanda that they would reduce the rate to 89c per minute during peak times while leaving the off-peak rate unchanged at 77c/minute. The agreement was scheduled to take effect on 1 March.

However, ICASA argued at the time that the mobile operators were trying to bind the authority into agreeing to an "illegal" contract allowing the operators to set the rates until at least 2013. ICASA wants to be able to regulate the market and determine what the rates should be.

The authority said following an intervention by Nyanda, all three operators resubmitted an amendment agreement last week that sought to give ICASA more voice on the matter. The new interconnection agreements are expected to be effective by 1 June.

"The earlier agreement sought to bind ICASA to accept filing without question. This is illegal in that it attempted to bind ICASA," the authority's Thabo Magage told the committee.

Magage dismissed submissions by Vodacom that operators would suffer financial losses as a result of the reduction in interconnection charges.

"If they operate efficiently they will not lose anything... even the licence fees have been dropped so this thing that they will lose revenue it's unfounded," he said.

Magage said further public hearings will be held to allow stakeholders to air their views on the matter. South Africa is said to have one of the highest cellphone rates in the world and government wants to change this for the better