Cellphone rate cuts slowed

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VodacomSign Bloomberg File photo: Nadine Hutton.

Johannesburg - South Africa’s communications regulator will reduce the cost of terminating calls on mobile networks at a slower rate than previously announced after opposition from the biggest operators, Vodacom said.

The amount mobile-phone companies pay each other to end calls on another network will fall 20 percent to 16 cents from March 2015, Johannesburg-based Vodacom said in an e-mailed response to questions.

That compares with 15 cents announced in January.

The move is designed to help smaller companies compete with Vodacom and MTN, which dominate the South African market.

“We’re studying the announcement and will be providing feedback in due course,” Vodacom spokesman Richard Boorman said by e-mail today.

Paseka Maleka, a spokesman for the Independent Communications Authority of South Africa, wasn’t immediately available for comment.

The mobile-phone companies have 10 days to respond to the new proposals, according to Vodacom.

Vodacom and MTN took legal action against the regulator after the original rate reductions were announced, arguing that the process that led to the severity of the cuts was flawed and would force the two companies to cut jobs and reduce investment in Africa’s second-biggest economy.

Icasa agreed to review the decision after its proposals were deemed “invalid and unlawful” by a court in March.

Mobile termination rates will fall to 12 cents from March 1, 2016, compared with 10 cents in the first proposal, and to 8 cents a year later, Icasa said.

Vodacom shares traded 0.6 percent higher at 132.80 rand at the close in Johannesburg, paring their decline for the year to 0.2 percent.

MTN gained 2.7 percent to 257.31 rand. - Bloomberg News

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