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Vodacom: Rate cuts will cause financial harm

Both Vodacom and MTN are trying to prevent Icasa from lowering mobile termination rates.

Vodacom and MTN have gone head-to-head with Icasa over rate cuts. Picture: Sapa.

JOHANNESBURG - Mobile termination rates (MTR) will cause upheaval in the market and result in irreparable financial damage, Vodacom told the South Gauteng High Court on Tuesday.

Mobile giants Vodacom and MTN approached the Johannesburg court in a bid to prevent the Independent Communications Authority of South Africa (Icasa) from lowering rates.

Both companies claim the MTR reductions were done unlawfully.

The rates are the fees which cellphone companies pay each other for calls made between networks.

Cell C's financial gain was the focus of submissions made by Vodacom and MTN in court on Tuesday.

Both companies say Cell C stands to gain most from new fees.

MTN claims in light of the new MTR's, it would fork out a sum of R450 million within six months to all smaller cellphone firms.

It says Cell C will receive R118 million over the same period.

Under the regulations, bigger companies like MTN and Vodacom get 20c per minute for termination rates while smaller firms will receive 44c per minute.

The case will resume on Wednesday when Icasa makes its submissions.

MTN's legal representative, Advocate Alfred Cockrell, said if the regulations are given the green light, the cellphone network will indirectly be subsidising smaller companies.

He accused Icasa of failing to properly consult while drawing up regulations.

Cockrell further claimed outdated data was used to reach what he called "new asymmetrical rates".

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