While ICASA managed to squeeze out details of the new telecoms termination rates (mobile – MTR – and fixed line) late last week, phone companies have been slow to respond to the announcement.
Cell C, never a company to remain silent on the issue for long – after all, it was lobbying from South Africa’s third largest network that pretty much got the new MTRs into being any way – is first out with an official response. And it’s not happy. According to a media statement that’s just dropped on our desk, the firm says that while the proposed baseline charges are fine, the level of asymmetry will reinforce the status quo where Vodacom and MTN dominate the market witharound about 80% of all customers, and make it hard for smaller companies to compete.
“Asymmetry” is the term for applying different charges to operators based on their size. Under the ICASA proposals, for example, smaller operators will pay 10c less per call than larger operators to connect their calls to a different network.
ICASA’s ultimate objective is to get to the point where large operators pay 10c and small operators pay 2c per call. Its original proposal, however, was blocked in the High Court and so the rates introduced last week show more staggered reductions over a longer period of time.
Because this necessarily means that the difference between what larger operators and smaller operators will pay is less, the firm is feeling let down. From its statement:
The proposed regulations appears to be an acknowledgment by ICASA that the duopoly that exists in the South African market today is an acceptable state of affairs and will be allowed to continue. In the long term this will be catastrophic to both the wider telecommunications industry and to the South African consumer.
The significant reduction in the cost to communicate over the past 18 months was entirely brought about by competition from Cell C. Should the South African market return to the duopoly of old, all South African consumers will suffer regardless of which network they use. Cell C is disappointed with these rushed regulations arising from a process about which we also have concerns.
It also included a handy chart showing the difference between the original plans and the new ones, from its perspective.
