South Africa Communiqué
9 February 2010
Talks cause delay in interconnection rate cut

The cellular operators Mobile Telephone Networks (MTN), Vodacom, Cell C and Independent Communications Authority of South Africa (ICASA) are at loggerhead over the new interconnection fee agreement, which the regulator rejected earlier this month (February). ICASA dismissed the proposed new tariff signed by the three operators saying it “sought to bind the authority to an undertaking not to review mobile termination rates until 1 March 2013”.

The rate is currently set at R1.25 a minute at peak time. In 2009 the operators agreed with the minister of Communications Sphiwe Nyanda to cut the rate from R1.25 a minute to 89c by 1 March 2010, in January 2010 agreed again to cut the fee to 85c by 2011 then 80c in 2012, initially the government had proposed the rate of 60c a minute.

Cell C said ICASA had, for now, not offered an alternative to the operators. “Cell C is hopeful that a solution can be found as a reduction in interconnect is vital for the competitiveness of the market.”

Tinyiko Rikhotso, Nyanda’s spokesperson said the minister had reached an in principle agreement with the operators, but beyond that it was ICASA’s duty to implement the agreement. Meanwhile ICASA is finalising its long – awaited draft regulations on interconnection fees, which are expected to be released in March 2010. Before it could impose regulations, the regulator had to conduct a study to determine, among other things, the cost of interconnection, which is estimated at about 40c a minute.

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