Give us a break on call rates, Cell C tells Icasa

Cell C CEO Jose Dos Santos on Friday said communications regulator Icasa needs to make bolder decisions in its call termination regulations to assist smaller operators take on the two giants of the sector, Vodacom and MTN.

Dos Santos was reacting to the draft termination regulations for fixed and mobile calls published this week. Termination rates are the prices operators can charge each other to carry calls between their networks. They have been reduced substantially over the past eight years, and Icasa wants to reduce them still further, while narrowing the “asymmetry” benefits bestowed on smaller operators, including Cell C and Telkom.

Telkom CEO Sipho Maseko, in an exclusive interview with TechCentral on Thursday, severely criticised the draft regulations, warning they would hurt smaller players — and especially Telkom — hardest. He said Telkom would be forced to conduct widescale retrenchments — up to 10 000 of its 18 000-strong workforce — if the draft regulations are not amended.

Though Dos Santos said Cell C is still reviewing and calculating the effect of the draft call termination regulations on its business, and although it is “pleased” that Icasa has determined that the call termination market is “not competitive and requires remedies” including asymmetry for smaller players, the “modelling exercise done by Icasa can and should provide for increased asymmetry”. This is needed, he said, to “address the historic and continuing imbalance that favours the dominant operators”.

“Asymmetric regulations definitely assist smaller operators and ultimately result in a reduction in retail prices when the competitive position of these smaller operators is enhanced,” he said in a statement.

“Despite their ongoing protestations, asymmetry has little to no effect on the dominant operators, due mainly to the fact that only a tiny proportion of their overall voice traffic is actually affected by this asymmetric rate. In this context, there is no harm and only a benefit in providing a regulatory framework with as much asymmetry as possible,” Dos Santos added.

“Anything less will continue to support the current market structure and excessive dominance displayed by Vodacom and MTN which, as history has shown, do not reduce prices unless their smaller competitors lead the way.”

TechCentral asked Vodacom and MTN to comment on the draft regulations, but they had not done so by the time of publication.  — © 2018 NewsCentral Media