Icasa announces cost standard

The Independent Communications Authority of South Africa has announced that it has adopted the Long-Run Incremental Cost Plus ("LRIC+) as the cost standard for the bottom-up and top-down modelling to determine the cost of mobile and fixed wholesale voice call termination.

The basis for the decision of the cost standard adopted is as follows:

1. LRIC+ would allow operators to recover a portion of joint and common costs incurred in the provision of wholesale voice call termination service through termination rates.
2. To ensure continued investment in electronic communications networks in South Africa.
3. To correct the imbalances created in 2010 wherein the 2010 Call termination Regulations applied different cost standards to different markets.
4. To ensure a smooth transition from a Fully Allocated Cost standard used in 2010 to an eventual cost standard of pure LRIC.

A briefing document including the assumptions used for the top-down and bottom-up models is available on Icasa's website.