Johannesburg - Vodacom, MTN and Telkom are bracing themselves for the impact of the steep reduction in interconnection regulations, which the industry regulator introduced on Friday.
The draft call termination regulations published by the Independent Communications Authority of SA (Icasa) propose a drop in the rates for termination of calls on a cellular network to 10c a minute by March 1, 2016, from 40c currently.
The rate for termination of calls from Vodacom and MTN on Telkom’s fixed-line network is 12c. Interconnection rates are tariffs operators pay to terminate calls on each other’s networks.
This will be the second interconnection price reduction glide path implemented by Icasa following parliamentary deliberations in 2009 to reduce the rates from R1.25 a minute to 40c this year.
The reduction was expected to result in lower prices for consumers. “The authority finds that the market remains ineffective,” Icasa said on Friday.
The body also proposed that smaller operators Cell C and Telkom Mobile were entitled to continue charging their larger counterparts asymmetrical rates because of imbalances in voice traffic between operators. This imbalance reflected the differences in economies of scale between the telecoms operators.
Asymmetry allows smaller operators to pay a lower interconnection fee while charging larger players more to accept calls from their networks.
Icasa proposed that the asymmetric rate drop from 44c a minute to 39c from March next year. - Business Report