The new draft Call Termination Rates need to take into account South Africa’s telecommunications market “reality” and not ignore the global convergence where fixed and mobile are no longer distinguished, information and communications technology group Telkom CEO Sipho Maseko said on Monday.
The Independent Communications Authority of South Africa (Icasa) last week published the draft Call Termination Rates, calling on all stakeholders to actively participate in the consultation process.
Despite the implementation of mobile termination rates (MTRs) three years ago and an attempt by Icasa at opening up the telecommunications market more for smaller players, the market remains dominated by a duopoly.
Moving forward with the new proposals within the draft document will likely widen this gap between the bigger players and the smaller mobile operators, Maseko indicated to media during a press conference.
“Icasa’s decision to reduce fixed termination rates (FTRs) at a faster pace than the reduction in MTRs would entrench the duopoly of the largest mobile operators and reduce competition. It is also out of kilter with convergence in technology,” he explained.
“The proposed FTRs require cost reductions that are not feasible within a three-year time frame without significant job losses and do not recognise that the telecoms landscape has changed to such an extent that there is one converged voice market, rather than separate fixed and mobile markets.”
Icasa proposed a 70% decrease in FTRs, compared with a reduction of only 31% in base MTRs.
The draft regulations suggest a glide path of a 12c and 8c charge on the termination of a call on mobile and fixed line respectively from October 2018 to September 2019; 10c and 5c for the period October 2019 to September 2020; and again down to 9c and 3c from October 2020.
In addition, Icasa proposed asymmetry for small players and new entrants during the three-year glide path, with asymmetry for mobile services at 5c from October 2018 to September 2020 and 4c from October 2020 onwards.
Asymmetry for fixed services is proposed to be 1c from October 2018 to September 2020 and fall away completely from October 2020 onwards.
“South Africa should be working towards symmetry between fixed and mobile termination rates in a manner than enables fair competition and reduces the cost to communicate,” Maseko said.
“The small reduction in MTRs represents a missed opportunity to reduce the cost to communicate for the large majority of South African telecoms users and disproportionately targets Telkom.”
Telkom suggests that Icasa rather maintain higher levels of asymmetry as it continues a review of the cost modelling and other regulatory streams, such as the determination of South Africa’s priority markets.
The deadline for submission of written comments is September 7 and the effective date for the regulations is scheduled for October 1.