Top Lawyer Says Icasa Can Cut interconnection costs in South Africa


Mobile calls could be slashed by a massive R1 a minute almost immediately if the industry regulator agrees with fresh legal opinion declaring that the fees can be forced down with no need for further market research.

The hefty R1,25 a minute that operators charge to switch calls between rival networks makes SA's calls among the dearest in the world.

But advocate Gilbert Marcus believes the Independent Communications Authority of SA (Icasa) is wrongly refusing to force down that interconnection fee by claiming it cannot act without conducting in-depth market research. No more studies were necessary, and it could cut the fees now, he said.

If Marcus is correct, Icasa could finally tackle the contentious issue and force the operators to drop their interconnection fees, its chairman, Paris Mashile, said yesterday. "This is very interesting," he said, and if Marcus was correct, Icasa would readily intervene.

First Icasa would need to see if the cellular operators agreed with the legal interpretation by Marcus so it could brace itself for any litigation, Mashile said. Until now, Icasa has believed it could only force down the rates after defining which operators have dominant market share -- yet it has failed to tackle that research.

The legal report was commissioned by John Holdsworth, CEO of ECN Telecommunications. He has forwarded it to Icasa urging it to restrict the operators to a far more realistic fee of 25c. The report was also sent to Communications Minister Siphiwe Nyanda, who has already said regulatory intervention may be needed, but that Icasa had not achieved much and had failed to get to grips with the issue.

Even Alan Knott-Craig, the retired CEO of Vodacom , said the interconnection rate could drop easily to 60c if the networks wished to do that. Holdsworth said 60c was still far too expensive, but Vodacom and MTN would fight for a gradual reduction so they could adjust to the loss of income slowly. "The actual cost of terminating a call is between 10c and 25c, so 25c would give consumers a break and still let the operators make large amounts of money," he said.

Business Day