Top lawyer says Icasa can cut call costs

The hefty R1.25 a minute that operators charge to switch calls between rival networks makes SA's calls among the dearest in the world.

But advocate Gilbert Marcus believes the Independent Communications Authority of SA (Icasa) is wrongly refusing to force down that interconnection fee by claiming it cannot act without conducting in-depth market research. No more studies were necessary, and it could cut the fees now, he said.

If Marcus was correct, Icasa would finally tackle the contentious issue and force the operators to drop their interconnection fees, its chairman, Paris Mashile, said yesterday, 18 August 2009. “This is very interesting,” he said, and if Marcus was correct, Icasa would readily intervene.

First Icasa would need to see if the cellular operators agreed with the legal interpretation by Marcus so it could brace itself for any litigation, Mashile said. Until now, Icasa has believed it could only force down the rates after defining which operators have dominant market share — yet it has failed to tackle that research.

The legal report was commissioned by John Holdsworth, CEO of ECN Telecommunications. He has forwarded it to Icasa urging it to restrict the operators to a far more realistic fee of 25c. The report was also sent to Communications Minister Siphiwe Nyanda, who has already said regulatory intervention may be needed, but that Icasa had not achieved much and had failed to get to grips with the issue.

Even Alan Knott-Craig, the retired CEO of Vodacom, said the interconnection rate could drop easily to 60c if the networks wished to do that.

Holdsworth said 60c was still far too expensive, but Vodacom and MTN would fight for a gradual reduction so they could adjust to the loss of income slowly.

“We need to give long-suffering consumers a break and cut to the actual cost immediately. We are going to put enormous pressure on Icasa and the minister to act.

“The actual cost of terminating a call is between 10c and 25c, so 25c would give consumers a break and still let the operators make large amounts of money,” he said.

Marcus believes Icasa has misinterpreted the law, and said it and the minister could impose price cuts. Foreign interconnection rates could be used as a benchmark.

Source: Business Day

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