There has been a positive response across the telecommunications industry to Icasa’s announcement of the new call termination rates.
“We welcome Icasa’s decisions and believe they serve the country’s interests. We would like to see these new rates contribute to consumers and business paying less to communicate and benefitting economic growth and job creation over time. The high costs to communicate have deterred global and domestic investment in this country,” says Minister of Communications, Yunus Carrim.
“These rates provide for greater competition which we expect to lead to reductions in the cost to communicate. We understand that Icasa consulted extensively with all the parties and we feel that they should accept the outcomes. What some of them may lose in immediate profits will be exceeded by what they will gain in the medium and long term.”
Cell C has also welcomed the Icasa announcement, which will foster a more balanced and competitive mobile industry, to the benefit of consumers. Icasa announced that its decision was based on the need to reduce the high cost to communicate, act in the public interest, and incentivise investment.
“This comes as a relief to Cell C as we have over the last 18 months committed ourselves to leading price competition even at the expense of our own margins, while motivating to Icasa for pro-competitive relief. Without this intervention it was likely that the South African market would have continued to have been an effective duopoly to the detriment of the consumer, industry and the South African economy.
“With the support of this regulation, the mobile market will continue to become more competitive on a sustainable basis,” says Cell C Acting CEO, Jose Dos Santos.
By increasing its share of the market and putting further pressure on the dominant competitors, Cell C is confident it can drive access to more affordable communications for all South Africans, even those not on its network.
“Icasa has made a decisive and positive move in publishing these regulations, which we believe is another critical step in levelling the SA telecoms market,” says Dos Santos.
“This is the game changer for Huge Telecom,” comments James Herbst, CEO of Huge Telecom Proprietary, one of the companies which anticipates the Mobile Termination Rate cuts benefitting their business positively. “We had three items on our birthday wish list, and this was one of them,” he adds.
The reduction, which will result in asymmetrical termination rates within the mobile telecommunications industry, will benefit those networks which have less than 20% of the market share as they will be paying a significantly lower termination rate than those networks with a more than 20% market share.
Huge Telecom supplies full-suite corporate telephony services, primarily based on GSM technology, to over 7 500 businesses in South Africa.
Further cuts are to be implemented annually on 1 March in 2015, 2016 and 2017 – offering those networks with less than a 20% market share as at 1 March 2015 and 2016 further relief, and those with a less than 10% market share as at 1 March 2017, an additional rate cut.
Next year, the rate will fall to 15c/minute, and in 2016 it will be 10c/minute. The asymmetric termination rate will be 42c/minute next year, 40c/minute in 2016 and 20c/minute in 2017.
The declining cost to communicate complements the goals of SA Connect, the country’s broadband policy, of bridging the digital divide by making broadband accessible and affordable.