Termination rates: the full judgment

We publish the full judgment, handed down by the high court in Johannesburg on Monday, on communications regulator Icasa's call termination rate regulations.

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The high court in Johannesburg on Monday found that communications regulator Icasa’s 2014 call termination regulations were “invalid and unlawful” but said the cuts to termination rates will take effect as planned on 1 April for a period of six months.

Judge Haseena Mayat granted a final order in favour of MTN and Vodacom, but used her “discretion” to act in the “public interest” by ordering that the cuts in the rates – which operators charge each other to carry calls between their networks – be implemented regardless.

“I am of the view that this is a proper case, which warrants this court exercising its discretion to promote the purposes of the [Electronic Communications Act], premised upon the public interest,” Mayat said in her written judgment.

TechCentral has published the court’s full judgment as a PDF below this article. We have also highlighted some of the key parts of the judgment for ease of reference.

The amended 2014 regulations (or the denuded 2014 regulations) are … unlawful and invalid.

Having established a clear right to judicial review, it follows that the injury actually committed to MTN and Vodacom is obviously that their right to fair administrative action in terms of section 33 of the constitution [has] been violated. As demonstrated in the papers, the low termination rates in the amended 2014 regulations will also cause commercial prejudice to MTN and Vodacom. Finally, in this context, I am also satisfied that MTN and Vodacom cannot obtain adequate redress in some form of “ordinary” relief other than judicial review, nor was any other existing remedy suggested as appropriate. Thus, I am also satisfied that the third requirement of a final interdict has also been met. This is particularly so as the infringement of any constitutional right is generally a continuous violation of the said right.

…on the basis of the factual averments in the answering affidavit, it was effectively explained by Icasa that the implementation of the 2010 regulations promoted competition, lowered costs and facilitated access to affordable telephony for the majority of the population… The importance of such affordable access to telephony to indigent members of our population, particularly in remote rural areas, can hardly be disputed.

A further consideration favouring suspension on the basis of my discretion is the fact that MTN and Vodacom are both very profitable companies, motivated in these proceedings, if not exclusively, by commercial considerations … [Their] potential loss of revenue has to be weighed against the likelihood of a price war triggered by Cell C and Telkom Mobile, which will benefit the public if the amended 2014 regulations come into force, even for a limited period.

…the application of the 20c figure during the proposed suspended period is also not likely to be prejudicial to MTN and Vodacom given the fact that there is effectively no evidence to challenge the contention by Icasa that the said figure in fact exceeded actual costs. This is so despite the fact that I have found that the determination of that figure by Icasa was irrational and arbitrary. It appears to me that in this regard that both MTN and Vodacom and effectively shielded behind the armour of fair administrative rights with as much vigour as shielding behind the armour of non-disclosure (in the absence of accounting regulations).

…I am of the view that this is a proper case, which warrants this court exercising its discretion to promote the purposes of the [Electronic Communications Act], premised upon the public interest.

As already indicated, all the information necessary for this court to exercise its discretion was incorporated in the affidavits, particularly the undisputed aspects of the answering affidavit of Icasa. As suggested by Icasa, I am of the view that it is just and equitable in the circumstances to suspend the invalidity of the amended 2014 regulations for a period of six months from 1 April 2014.

…MTN and Vodacom succeed with their applications for final judicial review. However, in the interests of justice and equity, it is appropriate for this court to suspend the impugned regulations for a period of six months.  — (c) 2014 NewsCentral Media

Share this article

  • PsiCoRe

    “As demonstrated in the papers, the low termination rates in the amended
    2014 regulations will also cause commercial prejudice to MTN and
    Vodacom.” – Not going to say I told you so… although much of this case was screwed up by ICASA’s own incompetence. These two monsters need to be challenged but there’s no South African company that could hope to do so.

    “It appears to me that in this regard that both MTN and Vodacom and
    effectively shielded behind the armour of fair administrative rights
    with as much vigour as shielding behind the armour of non-disclosure (in
    the absence of accounting regulations).” – Well that’s par for the course with them. Either hiding the truth or lying.

  • Stochos

    They are tacitly colluding at least.
    Where is the Competition Commission in this whole mess?
    They have been screwing the poorest people of the country since their inception.

  • herman

    ok so what happens after 6 months?

  • Magomarele Gomi Thobejane

    Travesty of justice against poor MTN and Vodacom. ICASA is going to rampage them in 6 months time.

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