S.Africa telecoms regulator lifts connection rates for small networks

by Reuters 0

The rates increase the amount small operators can charge their dominant rivals from next month.

The Independent Communications Authority of South Africa (ICASA) has been on a quest to reduce the rates, which analysts say keep tariffs in Africa’s most advanced economy among the highest on the continent.

(READ MORE: Icasa to cut S.Africa’s termination rates)

Market leaders Vodacom and MTN will continue to charge calls to their networks at 20 South African cents for the next year.

To support smaller networks, ICASA raised the so-called asymmetrical termination rate – the amount [DATA VOD:Vodacom] and [DATA MTN:MTN] have to pay for calls to their smaller rivals – to 31 cents from the 10 cents proposed in earlier draft regulations.

That rate will fall to 24 cents after five months.

Unlisted Cell C and the mobile unit of Telkom SA, placed third and fourth, have complained they have to pay a disproportionately high amount as most calls to their networks are from their dominant rivals.

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

The two big operators have contested ICASA’s attempt to reduce the fees, saying the move effectively subsidises competitors who have not invested much on networks.

“We have some concerns about the asymmetry granted to certain companies and the potential impact that this could have on our business,” Vodacom said in a statement.