Telkom decries final call termination regulations

Telkom said on Wednesday that it is disappointed with communications regulator Icasa’s final call termination regulations and warned they could have an impact on its operations.

The operator’s CEO, Sipho Maseko, warned previously that a draft of the regulations, published in August, could lead to a jobs bloodbath at the company if implemented without significant changes.

“This decision is another missed opportunity for Icasa to reduce the cost to communicate while increasing competition,” the company said in e-mailed response to a query from TechCentral on the new regulations.

“This was an opportunity for Icasa to introduce a call termination rate structure that challenges the duopoly in the mobile market and reduces the costs to communicate through encouraging increased competition.”

Call termination rates are the fees operators can charge each other to carry calls between their networks. They have been reduced significantly in the past decade, with many in the industry crediting this for reduced retail call prices.

Telkom said the final regulations “do not recognise the increasing convergence of fixed and mobile technologies as a means of conveying voice calls”.

“Telkom is reviewing the impact of this decision on its operations.”

SwitchTel, which was also critical of the draft regulations, has hit out at Icasa over the final rules.

“I am still analysing the figures. However, I can see that there is still an increase of fixed subsidisation of the mobile market (versus the current rates) and a move away from convergence,” SwitchTel CEO Greg Massel said.

‘Against international precedent’

“I’m not aware of any other market where the regulator has intervened in a manner that benefits those that have been in the market for the longest time and obtained the largest market share at the expense of new entrants with small amounts of market share. Such an approach is fundamentally contrary to all pro-competitive principles and international precedent,” he said.

“When Icasa goes not only against international precedent and pro-competitive principles but also contrary to its own approach in previous years, one has to question the outcome that it hopes to achieve and the integrity of their process.”

The final regulations will go into effect on Monday, 1 October.

They state that for operators with more than 20% share of total minutes terminated in the wholesale voice market, the rates for fixed-line termination will be 9c/minute in the first year, falling to 7c in October 2019 and 6c in October 2020. For operators with over 20% share in mobile, the numbers are 12c, 10c and 9c over the three-year glide-path period.

For operators with 20% or less share of total minutes terminated in the wholesale voice market, the rates for fixed-line termination will be 10c/minute, falling to 8c in October 2019 and 6c in October 2020. For mobile, the rates will be set at 18c/minute from next month, then 16c in October 2019 and finally 13c in October 2020.  — © 2018 NewsCentral Media