MTN stops S/African telecoms regulator from tariff cut

The Independent Communications Authority of South Africa (ICASA) had planned to cut in half so-called “mobile termination rates” at the start of March, but has moved that to May 1.MTN Group on Friday filed papers asking Johannesburg’s South Gauteng High Court to review ICASA’s decision to halve the rate to 20 South African cents per […]

The Independent Communications Authority of South Africa (ICASA) had planned to cut in half so-called “mobile termination rates” at the start of March, but has moved that to May 1.
MTN Group on Friday filed papers asking Johannesburg’s South Gauteng High Court to review ICASA’s decision to halve the rate to 20 South African cents per minute per call. The rate would be reduced further to 10 cents by March 2016.
“MTN has given us until the 18th to file answering papers. We can’t do that because of the timelines. It is too close,” ICASA spokesman Paseka Maleka told Reuters.
“We therefore decided to extend the implementation date from 1 March to 1 May and give ourselves more time to respond,” he added.
Paseka said MTN’s application was complex, comprising some 399 pages, with the court expected to hear the matter in two weeks on February 25, giving it little time to respond.
South Africa has taken a more aggressive approach to regulating the cost of communication in Africa’s largest economy, where the cost of making calls has prevented foreign investment, the communications minister said.
The regulator says the cut in mobile termination rates (MTR)will improve competition, but big operators argue they have invested most in networks and the reduced rates would benefit smaller rivals such as Telkom SA and unlisted Cell C.
“MTN believes that the decline in mobile termination rates (MTRs) must be driven by a fair process and appropriate costing study ensuring MTRs are reflective of the costs incurred by all players in the market, including smaller players,” the mobile operator said in a statement.
Vodacom Group, another leading mobile operator and South African subsidiary of Britain’s Vodafone Plc, has said the move could cost it as much as 1 billion rand in 2015.
It is also expected to begin its own legal challenge of the decision.
The small players have applauded the cuts saying they have been paying huge amounts of money to bigger operators because the bulk of their customers’ calls are to Vodacom and MTN users, which have more than 56 million customers between them.
Meanwhile, MTN recharge cards denominations are still being sold above the stated retail prices in some places in Nigeria, more than a month after the company promised to restrain vendors from selling above stipulated prices.
Since early January MTN Nigeria vendors have been adding N10 or N20 to price of each MTN recharge card denomination, a development dealers blamed on MTN who, they said, had increased the prices at which it used to sell to them.
The company had denied increasing the retail prices of its recharge cards, saying any variance from the authorised face value of recharge cards is without its knowledge or authority.
But the dealers said MTN should be blamed as it has increased the wholesale prices of its cards.
The dealers said MTN met with them last year where a decision to increase the prices of its recharge cards was made.
A telecoms right group, National Association of Telecoms Subscribers of Nigeria (NATCOMS) had given the telecoms operator a two week ultimatum to restrain its vendors from selling the cards above the retail prices.
NATCOMS president Deolu Ogunbanjo had told Daily Trust in an interview that a protest letter had been sent to the Nigerian Communications Commission (NCC) on the MTN card issue.  
Ogunbanjo said if MTN failed to reduce retail prices of its cards at the expiration of its ultimatum, it would issue a directive telling all MTN customers to port to other networks.