ICASA has published its draft call termination rates that will go into effect from the beginning of October and will be in place until the 28th of February 2018. Termination rates are the prices that communications operators must pay each other when a call goes from one network to another. ICASA has been pushing for a system in which smaller operators pay less than large ones, to stimulate competition, for some time.
The new rates are slightly different to the ones that were introduced earlier this year, which mobile operators successfully challenged in court. They will still reduce the termination rates over time, albeit slower than the previous rates would have done, and also include a level of asymmetry which means that the smaller operators (Cell C and Telkom’s mobile division) will receive more money from the incumbents Telkom, Vodacom and MTN will in return.
Here’s the new rates explained in simple charts.
To qualify for the asymmetry rates an operator will need to have less than 20% of the total terminated minutes on either fixed or mobile which sounds complicated in theory but means that Cell C and Telkom Mobile will qualify for it at the moment and more than likely for the entire period unless something happens drastic happens to the market place.
Fixed line termination rates will remain at their current 12c per minute for calls in the same area code and 19c per minute for long distance calls but will equalise with the mobile termination rates from the 1st of March 2015.
The rates will mean that the larger operators will still have to pay a bucket load of cash through to the smaller guys during the next three and a half years but the rate of decline in the overall termination costs will be slightly less than ICASA originally planned for meaning that they will still continue to make more money out of the consumer and will therefore be happier overall, we think.
In the end reductions in the termination rates, both fixed and mobile mean that lower call prices should begin to find their way to consumers which is never a bad thing for us at the end of the day, how fast and how much those drops will be are completely unpredicatable though so we’ll just have to wait and see. Now if only ICASA could do something about mobile data costs.[Image – sid1 on Flickr (CC BY 2.0)]