2 minute read
26 Mar 2014
5:34 pm

Icasa, Cell C warn of unregulated call rates

A lack of regulation in the mobile network market would likely harm consumers, the High Court in Johannesburg heard on Wednesday.

Picture: AFP

Kate Hoffmeyer, for Cell C, argued that if MTN and Vodacom were granted interim relief through the court suspending Icasa’s 2014 regulations, this would result in the market being unregulated.

This was because the Independent Communications Authority of SA’s (Icasa’s) current regulations, of 2010, would expire on Tuesday.

Cellphone network operators MTN and Vodacom are challenging the introduction of new asymmetrical call termination rates.

These are the rates that operators have to pay one another for calls to other networks.

Icasa wants to implement a set of regulations that would see these rates dropped to 10 cents per minute in 2016.

For 2014, MTN and Vodacom would have to pay 44c a minute to smaller operators, while the smaller companies would have to pay only 20c, in an asymmetrical structure.

MTN and Vodacom want the 2014 regulations scrapped. Alternatively, they want interim relief to prevent the introduction of the new rates until they have been reviewed.

Hoffmeyer said the legal teams for MTN and Vodacom had argued that interim relief would preserve the status quo, but this was “a fundamental error” on their part.

She argued that Icasa had made amendments to the end date for the 2010 regulations in light of this legal action, but that it was uncertain whether this would happen again.

On Tuesday, if the 2010 regulations expired and the court decided to grant the interim relief, then the market would be unregulated until the 2014 regulations could be reviewed.

Hoffmeyer said this would have negative consequences for consumers, such as in the period just before Cell C entered the market before the 2010 regulations were in place.

She said MTN and Vodacom had hiked the call termination rate six-fold then, because no regulations were in place.

Earlier, David Unterhalter, SC, for Icasa, also dwelt on the dangers of an unregulated mobile environment and the big players’ behaviour before Cell C began, which made it difficult for the newcomer to compete.

Earlier, On Wednesday morning, Gilbert Marcus, SC, also for Icasa, argued that the 2014 regulations should go ahead, despite the concession that the second, 15c, and third year, 10c, of Icasa’s three-year plan needed to be amended.

Icasa made no concession for the first year of the plan.

“There is no necessary or inevitable link between year one, and years two and three,” Marcus said.

Icasa has indicated it would take about six months to amend the regulations relating to 2015 and 2016.

“Icasa has no concerns about year one and has statutory power to… have a fresh look at years two and three,” Marcus argued.