South African Connection Rates Lifted for Small Networks

By Skills Junction

South Africa’s telecoms regulator has published final telephone network connection rates increasing the amount that small operators can charge their dominant rivals from October onwards.

The Independent Communications Authority of South Africa (ICASA) has taken strides to reduce the rates for some time now in order to keep tariffs in the country among the highest on the continent, competing with similarly major economies in the likes of Nigeria and Egypt.

As a consequence of the announcement, market leaders, MTN and Vodacom will continue to charge calls to their networks at 20 cents for the next 12 months, but, to support the smaller networks, the amount they will have to pay their smaller rivals for calls will increase from 10 cents to 31 cents.

Unlisted Cell C and the mobile unit of Telkom SA, placed third and fourth, have complained they have to pay a disproportionately high amount as most calls to their networks are from their dominant rivals.

The two big operators have contested ICASA's attempt to reduce the fees, saying the move effectively subsidises competitors who have not invested much on networks.

"We have some concerns about the asymmetry granted to certain companies and the potential impact that this could have on our business," Vodacom said in a statement.

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