Telkom has voiced its concerns regarding the draft decision by the Independent Communications Authority of South Africa (ICASA) to reduce fixed call termination rates more substantially than mobile termination rates.
While Telkom acknowledges the need for termination rates to align with costs, it advocates for equality between fixed and mobile termination rates.
Telkom Opposes ICASA’s Proposal to Drastically Cut Fixed Call Termination Rates
ICASA’s proposal entails a significant reduction in fixed-line termination rates, from 6c/minute to 4c in July 2024 and further to 1c in July 2025, representing an 83% cut over 15 months.
In contrast, mobile termination rates are set to decrease from 9c/minute to 7c in July 2024 and to 4c in July 2025.
Telkom argues that the blurring distinction between fixed and mobile calls, along with the increasing trend of fixed-mobile substitution, justifies parity in termination rates.
However, legal and regulatory specialist Kerron Edmunson suggests that ICASA’s decision is informed by extensive investigations and economic modeling.
Vodacom and MTN are Still Evaluating the Draft Regulations
The removal of asymmetry in termination rates between smaller and larger operators also affects Telkom and Cell C, disadvantaging them compared to incumbents like Vodacom and MTN.
The draft regulations exclude Telkom and Cell C from asymmetry benefits, granting them only to new market entrants for a limited period.
Despite concerns from smaller operators, Vodacom and MTN are still evaluating the draft regulations and have not yet issued statements.
The regulatory focus on voice market dynamics coincides with consumer behavior shifts towards data-based calls, diminishing the significance of termination rate reductions.
Telkom Insists on Regulatory Support
With interconnection revenue declining due to data-based communication platforms like WhatsApp, the impact of termination rate changes may be less substantial than anticipated.
While Telkom insists on regulatory support, the telecommunications landscape continues to evolve, prompting regulators and industry players to adapt to changing market dynamics and consumer preferences.
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