Cellphone cost move defended
THE Independent Communications Authority of SA (Icasa) yesterday defended its decision to reduce call termination rates as rational and reasonable.
Icasa has been on a drive since 2010 to reduce the fees operators charge each other.
But this move has been resisted by mobile network giants MTN and Vodacom, who approached the high court in Johannesburg this week in a bid to stop Icasa implementing regulations on these rates. These are due to take effect on Tuesday. The regulations provide that MTN and Vodacom will, from April 1, charge call termination rates of 20c a minute, a cut from 40c.
A part of the regulation that the rate would decrease to 15c per minute in April 2015 and 10c a minute in April 2016 has since been repealed by Icasa.
The regulations also provide that Cell C and Telkom Mobile may charge mobile termination fees of 44c a minute from April this year, 42c in March next year and 40c in March 2016.
Icasa counsel Gilbert Marcus SC, said Icasa’s approach of keeping the call termination rates in place for this year while reconsidering lower rates imposed for 2015 and 2016, was perfectly rational and reasonable. Icasa had become concerned about the robustness of its conclusions in relation to the rates for 2015 and 2016, but not those relating to the 2014 rates.
David Unterhalter SC, also for Icasa, said before Cell C entered the market in November 2001, Vodacom and MTN – the established players – substantially increased their mobile termination rates.
When the 2010 call termination regulations were implemented, these decreased the prices Cell C charged its consumers, he said.
MTN and Vodacom did not sit back to allow Cell C to increase market share, but rather decided to decrease their prices, Unterhalter said.
Cell C said MTN and Vodacom had not established that the mobile termination rate of 20c was above the actual cost of termination.
Kate Hofmeyr, for Cell C, said an order suspending this year’s regulations would be unprecedented and violate the principle of the separation of powers.