Namibia gets tough on mobile tariffs

Added by Editor on 2 March 2011.
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Namibia's regulatory authority is cracking down on retail call tariffs

SA isn’t the only country in Southern Africa waging battles over mobile call fees. Namibia’s dominant incumbent mobile operator MTC is involved a legal skirmish with that nation’s telecommunications regulator over retail rates.

MTC has objected to a 9 February decision by the Namibian Communications Commission (NCC) that the company had to stop charging higher prices for calls that their subscribers made to other operators’ networks. MTC’s rivals say the practice is anticompetitive.

Now MTC wants the NCC’s ruling, which took effect on 1 March, set aside and declared unconstitutional. It will obey the NCC’s decision until there is a final court judgment in the matter, it says.

This week, MTC gave up on an attempt to get an urgent court interdict to stop the Namibian Communications Commission from forcing it to lower rates. It’s the second time in a week it has been forced to withdraw, according to a report in The Namibian newspaper.

The application was brought against the NCC, Powercom (which owns rival network Leo) and fixed-line incumbent Telecom Namibia. MTC has about 85% market share in mobile in Namibia. Rival Leo, licensed three years ago, has taken about 15% of the market.

Namibia has led SA in cutting call termination rates — the fees the operators charge one another to carry calls between their networks. The rates have been cut to 30c/minute, but MTC rivals claim the company has not passed on the benefits to consumers in the form of lower retail rates.

It’s a situation mirrored in SA, where the country’s two largest mobile operators, MTN and Vodacom, have decided not to reduce their off-network call rates despite a cut in termination rates on 1 March.

In some respects, SA has followed the Namibian example in reducing termination rates. The NCC forced down the rates to 30c/minute over an 18-month period; in SA, the Independent Communications Authority of SA (Icasa) is bringing them down over a three-year period to 40c/minute.

SA parliamentarians last year raised Namibia as a model Icasa could follow in bringing down the rates at home.

Now, the NCC is getting more aggressive with MTC about bringing down retail rates after the cuts in termination rates didn’t have a commensurate effect on the prices charged to consumers.

According to Leo chief legal officer Tiaan Bazuin, MTC has argued that the NCC didn’t conduct a complete and independent market study before making its 9 February decision. “They say there wasn’t a proper hearing to determine dominance and anticompetitive practices,” Bazuin says.

Both Leo and Telecom Namibia have accused MTC, which enjoyed a monopoly in mobile services in Namibia for 12 years before Leo was licensed, of abusing its dominant position.

SA operators and Icasa will no doubt be watching developments in Namibia with a keen eye.  — Duncan McLeod, TechCentral

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  • Maqhekeza

    De Lille was applauded here in SA when she wanted to bully Icasa into proceeding without a market study. This is what happens when politicians pass a law and then want to bully the regulator to bypass it. Our rates took so long to come down because the law demands a process to be followed. It is always easy to bash Icasa if you dont have the full picture.

    Lets wait and see what the constitutional court decides.

  • Namibia

    With 85% market share I am sure you don’t need much of a study to determine dominance…..

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