By Ashleigh Brown, journalist, Justmoney
The Independent Communications Authority of South Africa (Icasa) has announced new call termination rates, favouring smaller cellular operators.
"The authority has maintained asymmetry for smaller operators and new entrants to facilitate competition in a market that has been determined to be uncompetitive," committee chairperson Nomvuyiso Batyi said in a statement.
A termination rate is the rate charged to call from one cellular provider to the other, for example, calling from a CellC number to a Vodacom one.
The new wholesale voice call termination rates were 20 cents for October 1, 2014 to September 30, 2015. For the following year it would be 16 cents, and 13 cents for the final year. These rates are set to help smaller mobile operators to pull in more revenue against their bigger opposition.
Favouring the smaller operators
However, the amount which the operators charged their customers was depended on them. This is because the retail rates for making calls does not necessarily come down because the terminations rates have.
"While we believe that this is a significant step towards making voice services more accessible to all South Africans, we must caution consumers that retail rates do not in all instances come down by the drop in the termination rate," said Batyi.
Therefore, smaller operators, such as CellC or Telkom Mobile could charge asymmetrical rates of 31 cents for October 1, 2014 to February 28 2015, 24 cents for the following year and 19 cents for the final year ending February 28 2017, highlighted Fin24.
New regulations
Earlier this year, MTN and Vodacom took Icasa to court to stop it from implementing a regulation on mobile termination rates. The new rates would have seen MTN and Vodacom pay 44 cents per minute to connect to Cell C and Telkom Mobile, said SABC News.
The two mobile operators argued that they would have had significant revenue loses if the termination rate charges were implemented.
Therefore, the new regulations see the termination rates drop even further, allowing for cheaper calls. However, mobile operators are losing revenue as more users prefer to make phone calls over data networks, thus not using termination rates at all.
“The mobile operators are fighting the wrong war, and they’re squaring up to the wrong enemy. They should be fundamentally revising their business models to prepare for Google, Facebook and Microsoft, who are aiming at their voice markets,” said Marius Burger, managing director of Indian Atlantic, in an article about African technology.