South Africa: Icasa drops call rates bombshell – interconnect rates that favour Cell C, Neotel and 8ta

Telecoms

The Independent Communications Authority of SA (Icasa) has introduced a wholesale call termination rates regime that benefits smaller market players, including Cell C, Neotel and Telkom’s 8ta.

The authority hopes the regulations, which determine how much operators may charge one another to carry calls on their networks, will assist in addressing what it calls “market failure” in South Africa’a’s telecommunications industry.

Peak-time mobile call termination rates will be cut to 73c/minute on 1 March 2011, to 56c on 1 March 2012, and 40c 0n 1 March 2013. Off-peak rates will come down to 65c next year, followed by cuts to 52c and 40c in 2012 and 2013. Mobile rates are currently set at 89c in peak times and 77c off-peak.

Icasa has also slashed fixed-line wholesale termination rates, with the rates falling to 19c/minute for national calls and 12c for local calls by 2013 and the distinction between peak and off-peak calls falling away.

Smaller market players — everyone except MTN and Vodacom in mobile markets and Telkom in fixed lines — may charge up to 20% more for calls they carry on their networks between 1 March 2011 and 28 February 2012. Thereafter, the maximum premium they may charge falls to 15%, and finally to 10% in March 2013.