Cell C withdraws MTR challenge

The long-running battle over mobile termination rates is over, with Cell C withdrawing a challenge against the regulations introduced in 2014 by communications regulator Icasa.


The long-running battle over mobile termination rates (MTRs) is over. Cell C has withdrawn its legal challenge against communications regulator Icasa over the rates that operators charge each other to send calls between their networks.

Icasa confirmed on Monday that Cell C had withdrawn its application to review its 2014 call termination regulations.

Cell C took the matter on review to the high court after accusing Icasa of making a “dramatic U-turn” in the regulations.

Although Cell C continued to benefit from “asymmetry” in the rates — it pays bigger rivals MTN and Vodacom less than they pay it to carry calls between their networks — the level of that asymmetry was dramatically from a previous level proposed by Icasa but challenged by MTN and Vodacom at the high court.

“Cell C is disappointed by the dramatic U-turn Icasa has made in its approach to remedy the current market failure and promote competition in a duopolistic market,” the operator’s CEO, Jose Dos Santos, said at the time.

“The massive proposed reduction in asymmetry completely eliminates any pro-competitive remedy,” Dos Santos said. “Icasa is now only proposing a marginal cost recovery, which is not, in terms of many international benchmarks and literature, the basis on which asymmetry is determined, and which will have the effect of entrenching the duopoly in the South African market today.

“This is a different proposition to the pro-competitive remedy that was gazetted in the original regulations and is particularly puzzling when the number of mobile network operators has reduced from four to a de facto three in the intervening period,” Dos Santos said.

“The proposed regulations appear to be an acknowledgment by Icasa that the duopoly that exists in the South African market today is an acceptable state of affairs and will be allowed to continue. In the long term, this will be catastrophic to both the wider telecoms industry and to the South African consumer.”

Cell C said on Monday that its decision to withdraw its legal challenge is “purely based on timing”.

“The decision to withdraw follows a lengthy process of more than a year of obtaining the record from Icasa, finalising the papers in the review application and obtaining a court date for the hearing,” it said.

“The length of time it has taken to get to court, which is the unfortunate reality of litigating in South Africa, has effectively made Cell C’s application redundant.

“This is because Icasa is due to start its review of the market in the next few months in anticipation of the existing MTR regulations coming to an end next year.

“This would mean that even a successful ruling in Cell C’s favour would have had little practical effect as the relief that Cell C was seeking was to ask the court to order Icasa to revisit its decision by conducting a market review.

“Cell C will participate in the upcoming Icasa process to consider MTRs post October 2017 to ensure that its concerns are addressed in that forum.”

Icasa said it “welcomes” Cell C’s decision to withdraw its application to the high court. “It vindicates Icasa’s view that the regulations were both lawful and procedurally fair.”  — © 2016 NewsCentral Media

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