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JSE-listed cellphone group Vodacom will cut interconnection rates on 1 March, provided its regulator lets it do so, and has promised to remove all references to a glide path in its new application.
Previous filings by the mobile operators, made on 25 January, sought to prevent the Independent Communications Authority (Icasa) from regulating interconnection rates until March 2013.
These rates are the fees the mobile operators charge each other and other telecommunications companies to carry calls onto their networks. They have been set at a relatively high R1,25/minute for several years.
Vodacom’s move, which is clearly aimed at regaining the upper hand after the mobile operators came under heavy fire from politicians and industry executives, will result in the rates coming down on 1 March, as envisaged in talks last year with communications minister Siphiwe Nyanda. However, this is contingent on MTN and Cell C agreeing to the removal of contentious clauses from the previous filings that insisted on imposing a glide path and Icasa giving its go-ahead.
“We are taking out the clauses we have learnt should not have been in those agreements,” says Vodacom Group CEO Pieter Uys.
The operators had proposed that the rate be reduced from 89c on 1 March, to 85c next year and 80c in 2012.
“We’ve always been committed to an early reduction in the rates,” says Uys. “The Icasa process was always going to take an extra few months.”
He says Vodacom geared itself up for a 1 March cut in the rates. It has been reducing costs and improving efficiencies in an effort to offset the impact on the group’s profits.
Uys said earlier this week that for every 10% reduction in interconnection rates, Vodacom could lose as much as R200m in profit.
MTN SA’s GM for regulatory affairs, Graham de Vries, said earlier this week that his company would attempt to address Icasa’s concerns. Cell C CEO Lars Reichelt has not responded to an e-mailed request for comment. — Duncan McLeod, TechCentral
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