MTN calls for scrapping of new S.African price cuts - CNBC Africa

MTN calls for scrapping of new S.African price cuts

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MTN's move comes just days after rival Vodacom said it would launch its own legal challenge against the price cuts. PHOTO: ABN Digital

This is an initial step towards a legal battle with the regulator.

MTN's move comes just days after rival Vodacom said it would launch its own legal challenge against the price cuts, which it said could cost it as much as 90 million US dollars in the coming financial year.

The Independent Communications Authority of South Africa (ICASA) said last month it would halve the rate a company can charge rivals for using its mobile network to 20 South African cents per minute per call from March1, with a further reduction to 10 cents by March 2016.

Pretoria says it wants to cut the costs to improve competition, but the biggest operators - who have invested the most in their networks - say it will hurt their profits and benefit smaller rivals such as Telkom SA.

"The legal letter was from MTN. They are saying we must withdraw the regulations," Nomvuyiso Batyi, a councillor at ICASA, told reporters after briefing parliament.

No one was immediately available to comment at MTN.

Batyi said ICASA expected Vodacom to join MTN in any legal challenge, adding the regulator would oppose such actions.

"We are confident in the procedure that we followed. Since 2007 we followed the same procedure, we don't know why there is a problem at this point," she said.

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