Vodacom threatens to cut SA investment, jobs

File photo: Nadine Hutton.

File photo: Nadine Hutton.

Published Oct 9, 2013

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Johannesburg - Vodacom Group Ltd., South Africa’s largest wireless operator, said it may curb investment and staff numbers if it’s unable to reach a compromise on lower mobile termination rates with the country’s regulator.

“There’ll be less revenue for us to reinvest into the business, as we’re subsidising our rivals,” chief executive Shameel Joosub said in an interview late yesterday.

The company will seek to review its business model by looking at marketing, employment and real estate costs, he said.

The amount mobile-phone companies pay each other to end calls on another network will halve to 20 cents ($0.02) from March 2014, the Independent Communications Authority of South Africa said in an October 4 statement.

Vodacom shares have declined 8 percent since the announcement, while nearest competitor MTN Group Ltd. is down 4.5 percent.

Vodacom, which is 65 percent owned by Newbury, England- based Vodafone Group Plc, will respond to the regulator and seek a compromise with regards to so-called asymmetry, which is designed to help smaller competitors by charging them less to use the larger networks of Vodacom and MTN.

“The recommendations are still at the consultative state, Paseka Maleka, a spokesman for ICASA, said by phone today.

‘‘We are still waiting for comments from all stakeholders,’’ including Vodacom. - Bloomberg News

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