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Mobile operators’ interconnect fee proposal ‘unfair’ – Minister

4th February 2010

By: Creamer Media Reporter

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Communications Minister Siphiwe Nyanda on Wednesday supported the Independent Communications Authority of South Africa's (Icasa's) decision not to review the interconnection amendment agreements submitted to it by cell phone operators MTN, Cell C and Vodacom.

The Department of Communications noted in a statement that the Minister respected the independence of Icasa and that he had previously indicated that the final decision on the matter rested with the regulator.

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In October last year, the cell phone operators had reached an agreement among themselves to immediately cut the blended wholesale interconnect tariffs by about 19%, with further reductions to be made year-on-year over the following three years.

Submissions regarding the agreement between the operators had been submitted to Icasa on January 25, but the regulator announced on Monday that it would not review the submissions, as the operators wanted to bind Icasa not to undertake a review of the mobile termination rates until March 2013.

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The Communications Department on Wednesday pointed out that Nyanda was of the view that the proposed three-year glide path period was "long and unfair to consumers", who he said had already been affected by high telecommunications costs for too long.

"The Ministry believes that the 89c [and] 77c [a minute fee] are reasonable, were they to be implemented within a shorter period than that suggested by the mobile operators," it added.

The operators were said to be charging consumers about R1,25 a minute in interconnection fees.

The operators' proposals included reducing the peak-time interconnection rates to 89c a minute by March 2010, to 85c a minute in October 2011 and to 80c a minute by October 2012.

Further, the operators had suggested that the off-peak interconnection fee should remain at 77c a minute until 2013.

Icasa was planning to release draft regulations on the effectiveness of competition in the wholesale call termination market by March this year.

"It is hoped that the outcome of these regulations will be a reduction in call termination charges as well as fair and equitable access to existing networks for all licensees," the regulator noted in a statement.

 

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