New cellphone rates are good news

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Copy of CT_cell0 (41067283) Bloomberg cheaper: The new interconnection rates are expected to help create more competition, eventually bringing prices down.

Johannesburg - Cellphone users will not immediately feel the effects of new interconnection fees on their pockets, but they will eventually benefit.

This is according to the Independent Communications Authority of SA (Icasa), which has set its sights on reducing how much South Africans pay to make cellphone calls.

The regulator was dealt a blow when the South Gauteng High Court in Johannesburg declared unlawful and invalid its regulations governing the cost of “mobile termination rates” – the fees operators charge their competitors to carry calls across their networks.

The court, however, suspended its order for six months, in effect allowing the new interconnection rates to be implemented in the meanwhile.

They come into force on Tuesday.

The suspension also gives Icasa time to fix the regulations.

According to Icasa spokesman Paseka Maleka, the smaller operators, such as Cell C and Telkom Mobile, are to pay only 20 cents – down from 40 cents – a minute when users call larger networks.

Larger networks MTN and Vodacom are to continue paying the same rates as before – 44 cents a minute – to smaller operators.

Maleka said while these rates would have no direct impact on consumers, because they involved the fees that networks charged each other, they would have an indirect effect.

He said networks were not obliged to lower their prices as a result of the regulations, but when mobile termination rates were lowered, the cost of calls would be lowered, leading to more competition between the operators.

“The consumers will benefit in the medium to long term,” he said.

“They won’t see the benefit right now, but will see the benefit moving forward when the prices come down.”

The new interconnection rates would allow the smaller operators to “make a bit more money” which could be used for infrastructure, meaning better service to consumers.

“But it will also create more competition and push down prices,” he said.

Right2Know national spokesman Murray Hunter said the court case essentially raised the issue of the public being overcharged for communication, violating its rights to communicate and to access information.

There was now six months for Icasa to “get its house in order” by producing valid regulations and for mobile operators to “come to the party” by bringing down costs.

Hunter said smaller operators had been given an important advantage and had a chance to “play the good guy”, but needed to make good on it by cutting costs to users.

“I would love to say consumers’ costs are coming down, but it’s not guaranteed.

“We have only been given the opportunity for that to happen.”

Cape Times

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