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Icasa hits out at MTN, Vodacom

The regulator says the two companies weren’t forthcoming with their books.

Mobile giants Vodacom and MTN are attempting to prevent the Independent Communications Authority of South Africa from lowering rates. Picture: EWN.

JOHANNESBURG - Vodacom and MTN can't claim new mobile termination rates (MTR) will cripple them financially because they weren't forthcoming with their books, the Independent Communications Authority of South Africa (Icasa) said on Wednesday.

The regulator told the South Gauteng High Court in Johannesburg the mobile giants didn't hand over books when it was drafting new rates.

Icasa further said the two companies enjoyed handsome financial gain from unregulated rates.

Vodacom and MTN approached the court in a bid to stop new MTRs from being implemented on 1 April.

Termination rates are the fees companies charge each other to connect calls between networks.

Icasa's legal representative Advocate David Unterhalter says the two network providers are doing a delicate tap dance around the regulator, trying their best to avoid fairness in the market.

The communications regulator initially stipulated that there would be a gradual decline in rates for the next three years, taking into consideration the difference between the bigger and smaller companies.

Icasa wanted to lower rates to 20c in 2014, 15c in 2015 and 10c in 2016.

Thereafter, rates would be the same across the board.

However, Icasa says it will review and recalculate rates for 2015 and 2016.

The regulator says the unequal path has been created to allow smaller players like Cell C an opportunity to square up and adjust during the period, claiming an immediate drop in rates for all would affect companies disproportionately.

Both MTN and Vodacom argue Cell C stands to gain the most from new fees.

Icasa earlier highlighted that since the first phase of regulation in 2010, Cell C managed to drop call rates for consumers from R2,85 to 99c per minute.

Cell C has argued the new rates could ultimately allow them to drop call rates, coupled with improved infrastructure and more robust competition in the market.

It says if the new regulations are given the thumbs down, it will result in a highly undesirable regulatory vacuum.

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