Business

Vodacom, Cell C to cut rates

8 February 2010

Mobile operators Cell C and Vodacom say they will lower their tariffs in March, despite the Independent Communications Authority of South Africa's (Icasa's) rejection of their proposals.

"In the interest of consumers and the country, Cell C is committed to the lowering of interconnection rates by 1 March 2010," the company's chief executive officer, Lars Reichelt, said in a statement on Thursday.

"We are actively engaging the relevant parties, including the department of communications, Icasa and our fellow operators."

Vodacom would do the same.

"Vodacom is committed to the reduction of the interconnection rates as announced by the minister [of communications] in November last year," company chief executive officer Pieter Uys said.

"We do not believe that the debate around glide paths or the formal regulatory process should delay the reduction in interconnection rates."

Vodacom supported the initial reductions next month and would work with Icasa to achieve this.

"We also fully support the ongoing regulatory process and trust that Icasa will swiftly finalise the regulations in this regard," Uys said.

The mobile operators proposed a reduction in peak-time rates from R1.25 to 89 cents a minute in March, 85c a minute in October 2011, and 80c a minute in October 2012.

The current 77c for the off-peak interconnection rate would remain the same until 2013. The operators made the implementation of their proposal subject to the condition that Icasa undertook not to review mobile termination rates until 1 March 2013.

On Tuesday, Icasa said it would not support the interconnection proposal and would first release draft regulations on the matter.

"These agreements sought to bind the authority to an undertaking not to review mobile termination rates until March 1, 2013," Icasa said in a statement.

"For this reason, the authority has decided not to review the interconnection amendment agreements as submitted."

Icasa planned to release its draft regulations on the matter in March 2010, and said it hoped these would lead to a reduction in charges and equitable access to existing networks.

Sapa