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ICASA releases draft 'call termination' regulations
The Independent Communications Authority of South Africa has made its determinations on the future of both mobile and fixed termination rates for the next three years, based on a review of industry conditions.
The revised rates are outlined in the tables below:
| Table 1: Termination to a mobile location, 2014-2016 | |
|---|---|
| Termination Rate | |
| Current | R0.40 |
| 01 March 2014 | R0.20 |
| 01 March 2015 | R0.15 |
| 01 March 2016 | R0.10 |
| Table 2: Termination to a fixed location: 2014-2016 | ||
|---|---|---|
| Between 0N | Within 0N | |
| Fixed Termination Rate | R0.19 | R0.12 |
The Authority makes this determination based on a review of the effectiveness of competition in the market for call termination.
In 2010 the Authority determined that ineffective competition existed in the provision of call termination because of, amongst others, inefficient pricing. The Authority imposed cost-oriented pricing on Vodacom and MTN for mobile termination and Telkom for fixed termination.
The Authority finds that the market remains ineffective with extremely high levels of concentration, where the market for termination to a mobile location and the market for termination to fixed and mobile locations have a Herfindahl-Hirschman Index of greater than 4000, where 1800 is the estimated highest value before a market exhibits ineffective competition.
The revised termination rates apply to Vodacom and MTN for mobile termination and Telkom for fixed termination. The Authority further determines that there is a need for further asymmetry based on:
• traffic imbalances reflecting economies of scale
• to promote investment
• to encourage competition
• to foster SMMEs
The level of asymmetry available to licensees offering termination to a mobile location is outlined in the table below:
| Table 3: Maximum asymmetric termination rate which a qualifying licensee may charge for termination in Market 1 | |
|---|---|
| Maximum Rate | |
| Current | R0.44 |
| 01 March 2014 | R0.39 |
| 01 March 2015 | R0.33 |
| 01 March 2016 | R0.26 |
| 01 March 2017 | R0.20 |
| 01 March 2018 | R0.14 |
| 01 March 2019 | R0.10 |
Licensees may qualify for this asymmetric rate if they have a market share of less than 20% of total minutes terminated to a mobile location. In effect, Cell C and Telkom Mobile qualify to charge these asymmetric rates.
The Authority finds no need to change the current asymmetric termination rates for fixed termination, meaning that asymmetric termination to a fixed location remains at 10%.
Stakeholders will have 14 working days following the publication of the Government Gazette to submit written comments on the draft regulations.
