South Africa: Icasa eyes new mobile tariff regulations on termination rates

11 August 2017

Telecoms

CAPE TOWN – South Africa could impose new restrictions on termination rates, the prices mobile phone companies charge for connecting calls made from other networks, when the current three-year regulations end on September 30, the telecom regulator’s acting chairman said on Wednesday.

The Independent Communications Authority of South Africa (Icasa) in 2014 implemented a three-year “glide path”, the timetable for bringing down rates gradually, for telecoms companies, including Vodacom and MTN.

The change hit profits after forcing the mobile phone companies to lower termination rates, which were deemed to be too high and hindering competition.

“As to whether we will determine a new glide path or will then regulate certain aspects of the voice market, it’s a decision that we will make and that will be in effect from October 1,” Rubben Mohlaloga, an Icasa councillor and acting chairman told reporters in parliament.

Mohlaloga said consultations with the telecoms industry were continuing and a final decision on the new framework was expected by the end of September.

The current wholesale call termination rates, which run from October 2014 to September 2017, saw a reduction from 20 cents per minute three years ago to 13 cents now for calls on mobile devices. In 2013 these costs were 40 cents per minute.

The government, which is also investigating other mobile prices as well as the state of competition in the mobile broadband market, is keen for communication costs to come down, saying the current market is uncompetitive and hampering economic development.

South Africa aims to double its mobile broadband coverage to 80% of the population by 2019, the government said last year.

According to a World Bank report released last year, South Africans paid around $14.10 for one gigabyte of data, the fourth highest out of 17 African countries, compared to lowest-rated Cameroon, where the same bundle cost around $2.10.

Source: MoneyWeb