Vodacom, MTN losers in SA termination rate spat – for now

Vodacom, MTN losers in SA termination rate spat – for now

01 APR 2014

Vodacom and MTN are reported to have failed in a bid to stop a mobile termination rate cut from being introduced in South Africa, although this is not the end of the dispute.

According to local reports, the South Gauteng High Court has ruled that new rates proposed by regulator ICASA are “unlawful and invalid”. But the order has been stayed by six months – meaning that the new proposed rates can be introduced in the meantime.

ICASA now has to draw up new regulations, which should deliver fairness – despite the differing views of the various stakeholders involved.

Vodacom and MTN, as the biggest operators in South Africa, stand to lose the most through the termination rate cuts, due to the fact that the size of their customer bases means they terminate more calls.

They have also complained about asymmetry in the new rates, with smaller operators Cell C and Telkom Mobile able to charge more to terminate calls – with the imbalance set to increase in favour of the smaller operators in the coming years.

Local reports said that Cell C has argued the current situation makes it difficult for the smaller players to confirm business plans, including passing on potential price cuts to consumers. This is because the current termination rate cut forms part of a longer-term roadmap, which is also now surrounded by uncertainty.

Vodacom has a 44 per cent share of South Africa’s 74.8 million connections, with MTN having a 35 per cent slice, according to GSMA Intelligence figures.

Of the smaller players, Cell C is bigger, with a 19 per cent share, with start-up Telkom Mobile lagging with a 2 per cent share.

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Steve Costello

Steve works across all of Mobile World Live’s channels and played a lead role in the launch and ongoing success of our apps and devices services. He has been a journalist...More

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