Cellphone tarrifs set to decrease

Icasa has announced lower termination rates meaning calls to other networks will become cheaper.

Icasa has announced lower termination rates meaning calls to other networks will become cheaper. Picture: Christa van der Walt/EWN.

JOHANNESBURG - New termination rates for small cellphone operators will come into effect on 1 March, the Independent Communications Authority of South Africa (Icasa) revealed on Wednesday.

Termination rates affect the fees companies charge each other for calls between different networks.

Operators such as Cell C and Telkom Mobile will see rates decrease from 40 cents to 20 cents.

But the big networks such as Vodacom and MTN will pay 44 cents per minute during calls to the smaller networks.

Tech Central founder and editor Duncan McLeod says, "Icasa is slashing these rates in the hope that this is going to translate into lower retail tariffs for consumers. There is evidence that previous cuts have actually had an impact and they're hoping that's going to continue."

Icasa plans to continue bringing down the rates over the next three years.

The rate for the smaller networks will decrease to 15 cents per minute in March 2015 and then to 10 cents in 2016.

On the back of the announcement, MTN and Vodacom shares slumped five and 5,7 percent respectively in late afternoon trading.

Both companies previously warned the regulator about being overly aggressive in reducing rates.