South African Regulator Wins Partial Victory in Attempt to Cut MTRs
Published on: 1st Apr 2014
Note -- this news article is more than a year old.
A South African court has ruled that planned mobile termination rate cuts by the regulator are illegal, but will still permit them to go ahead anyway.
Both Vodacom and MTN had taken the regulator, ICASA to court claiming that its introduction of substantially asymmetrical MTRs unfairly favoured the smaller mobile networks.
Although the Johannesburg High Court agreed with the mobile network's legal argument, it also set aside the order overturning the regulator's decision for six months, giving ICASA time to review how it carried out the MTR revision.
The court made the decision to give the regulator time to review its cuts, while still allowing them to go ahead after it found that the cuts would not result in the two larger networks operating at a loss.
A representative for the regulator welcomed the time the court afforded to reconsider the regulations.
Richard Boorman, spokesperson for Vodacom, welcomed the ruling that the MTR cuts were unlawful and invalid. He said Vodacom would have to study the full judgment before it could comment further.
Under the new plans, the larger mobile networks will have to pay 44c/minute to Cell C and Telkom Mobile to accept inbound calls, while the two smaller networks only have to pay 20c/minute if they accept a call from a customer on the larger networks.
The rates favours mobile networks with less than a 20% market share.
As last September, Vodacom and MTN had market shares of 43% and 36% respectively, while Cell C and Telkom Mobile held 17% and 2.2% of the market, respectively.