SOUTH AFRICA'S ICASA MULLS MOVES TO CUT MOBILE PRICES

Telecoms

South Africa's telecoms regulator is considering imposing new rules on the country's mobile operators, the watchdog said, after competition between the three firms has failed to bring down prices.

The Independent Communications Authority of South Africa (ICASA) said in a document released late on Monday it would investigate whether high prices are justified and whether there is sufficient competition in the market or more regulation is needed.

Vodacom, South Africa's biggest mobile phone company, and third-ranked Cell C had no immediate comment but said they would make statements shortly. No one at MTN was immediately available for comment.

High telecoms costs in Africa's biggest economy have been blamed for deterring foreign investors and impeding a boom in the call centre industry, which experts say has huge potential given that South Africa shares a time zone with western Europe.

ICASA last week unveiled stricter pricing rules for state-controlled Telkom, which has a virtual monopoly on South Africa's fixed-line network and has been accused by businesses and consumers of unfairly inflating prices.

The probe on mobile pricing came after a consumer group, the Communication Users Association of South Africa (CUASA), asked ICASA to investigate what it called the "obscene" cost of cell phone calls, arguing companies were ripping off customers.

ICASA said it had received several complaints about the cost of mobile calls and that the arrival of Cell C as a third mobile operator in November 2001 had failed to bring down prices.

"A regulator has a clear role to play as a proxy for competition where the presence of competitors alone is not sufficient to bring down costs of communication services and protect consumer interests," it said.

If the investigation shows that companies are profiteering, the regulator may force them to cut prices, but it will probably face a battle with cell phone companies, who will argue ICASA has no right to cap prices in a competitive environment, experts say.

ICASA is already probing the practice by operators of luring customers into lengthy contracts with the offer of a free handset and charging them huge fees if they cancel the subscription.

The regulator will also look into why text messaging is so much more expensive in South Africa than in other countries and why making calls from abroad is so pricy.

Vodacom is majority owned by fixed-line company Telkom and 35 percent held by Britain's Vodafone. Cell C is unlisted.

A mobile-to-mobile call costs roughly $0.54 per minute in South Africa compared with $0.39 in Hungary, $0.014 in the Czech Republic and $0.15 in Spain, all of which have at least three operators, according to ICASA.

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