Telkom says Icasa plans will result in significant job losses. Photo: Supplied.
Telkom says Icasa plans will result in significant job losses. Photo: Supplied.

Icasa plans to penalise Telkom

By Gabriella Steyn Time of article published Aug 25, 2018

Share this article:

CAPE TOWN - Telkom said that communications regulator Icasa's new plans to bring down call termination rates again would penalise Telkom more than its competitors.

Telkom said: "ICASA is proposing that fixed termination rates (FTRs) should fall by 70 percent compared with a reduction of only 31 percent in base mobile termination rates (MTRs) and that MTR asymmetry which supports new entrants should be reduced."

"This decision penalises Telkom much more than it does our competitors, although we are the smallest provider of mobile services in the market."

Icasa is awaiting comments on its new draft call termination rates, which were published on August 16.

“The effective date of the regulations, once finalised, will be 1 October 2018,” said Icasa.

Telkom said that this decision represents a missed opportunity to reduce the cost to communicate for the majority of telecoms users.

"It also disproportionately targets Telkom, as the champion in reducing the cost to communicate and the largest employer in the industry. While Telkom employs 18 000 people, the two largest mobile operators together employ 10 000 staff in total", said Telkom. 

According to Telkom, their operations and structure are very different from that of the other mobile operators. 

"We maintain a national network with around 1 900 exchanges. We use the revenue that we generate in dense urban areas (including termination revenue) to support services in rural areas of the country. Icasa’s proposal would undermine our ability to sustain rural services," said Telkom. 

Telkom added that the proposed FTRs require cost reductions that are not feasible within a three-year time frame without significant job losses. 

"They create fertile ground for foreign OTT players (who make virtually no contribution to jobs, GDP or tax revenue in South Africa) to go after the local fixed voice market"

"ICASA’s decision to reduce fixed termination rates at a faster rate than the reduction in mobile termination rates when Telkom faces higher costs and supports a large workforce in a country with an unemployment rate close to 30% adds additional pressure on the business," said Telkom. 


Share this article:

Related Articles