MTN to join battle against South African regulator
South African operator MTN will begin legal processes against the country’s regulator over planned rate cuts, the company announced yesterday.
The Independent Communications Authority of South Africa (ICASA) said last month that it was halving the fees mobile companies can charge rival players to use its networks to 20c per minute per call.
“MTN has exhausted all avenues of engagement with the regulator on this matter and is left with no alternative but to pursue its legal options,” said Zunaid Bulbulia, head of MTN’s South African unit.
ICASA said that the cuts are designed to reduce mobile termination rates and increase competition in the country, but bigger players – such as MTN and Vodacom – who have invested heavily in their networks, claim that it will hurt their businesses.
The changes are set to be effective from March 1 this year, and last week, Vodacom also announced its intention to challenge the proposed cuts, citing potential losses of up to $90 million in 2014.
Vodacom has also claimed that the regulator did not follow due processes in order to reach its decision. This has been denied by Nomyuyiso Batyi, a councillor at ICASA.
“We are confident in the procedure that we followed – since 2007 we followed the same procedure,” Batyi said.
“We don’t know why there is a problem at this point.”
ICASA claims that the cuts are necessary in order to increase international investment.
“The high cost of communication has deterred foreign investment and local domestic investment, and our view is that these rates provide for greater competition,” said communications minister Yunis Carrim.