The Independent Communications Authority of South Africa (Icasa) has said mobile termination rates, the wholesale fees mobile operators charge each other to carry calls between their networks, may fall further after they were reduced each year for the past three years.
Icasa GM for markets and competition Pieter Grootes says high termination rates “represent a price floor for off-net calls”.
He says Icasa “would like to ensure price competition is facilitated in the South African economy” and that a possible solution is to “establish a cost base for call termination”.
A three-year mobile termination rate reduction glide path that was set out in 2010, and that resulted in wholesale rates declining from R1,25/minute to 40c/minute this year, has resulted in reductions in mobile and fixed-line retail prices, but Icasa remains concerned about the cost of communication and believes competition in the market is still inadequate.
Grootes says the glide path resulted in a 68% reduction in termination rates over three-and-a-half years and that this is “not to be sneezed at”.
“Termination rates are a significant feature that impacts how businesses are run and are structured. There have been positive outcomes, and it has increased forms of competition,” he says. “When there’s a price reduction people call more.”
Grootes says Icasa will consider implementing another glide path, but that first it wants to give operators sufficient time to adjust their business models to the lower prices. The regulator has set a deadline of 25 October for finalising new termination rate regulations. — (c) 2013 NewsCentral Media
