S.African court gives nod to mobile rate cuts - CNBC Africa

S.African court gives nod to mobile rate cuts


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South African court gives nod to mobile rate cuts. PHOTO: ABN Graphics

The decision threw out a petition by the two biggest operators to prevent reductions scheduled for April 1.

(READ MORE: ICASA's move could cost MTN millions)

Vodacom and MTN had asked a Johannesburg High Court to stop the Independent Communications Authority of South Africa (Icasa) from forcing the operators to reduce the fees they charge one another to connect calls.

(WATCH VIDEO: MTN & Vodacom seek urgent interdiction to prevent implementation of MTRs)

Judge Haseena Mayat said Icasa's order to halve the rate to 20 cents was invalid but allowed for its implementation for six months, after which the regulator has to review the reduction.

Icasa had planned to slash the mobile termination rate to 10 cents by 2016 from 40 cents now as part of a government push to reduce call costs in Africa's largest economy.

(WATCH VIDEO: Have the telecom companies Ads crossed the line?)

The big operators argued they had invested most in networks and the reduced rates would benefit smaller rivals such as Telkom SA and unlisted Cell C.

"We will be studying the judgment but it appears that our position has been vindicated," said Vodacom spokesman Richard Boorman.

The company's shares were down 2.7 per cent at 1400 GMT, while those of rival MTN, which has fewer customers in South Africa, had lost 1.1 per cent.