Voda and MTN to sue Icasa

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March 26, 2014

It’s a battlefield between Independent Communications Authority of South Africa (ICASA) and two biggest mobile operators in South Africa, MTN and Vodacom. On Tuesday the 25th, the two cell phone networks took ICASA to Johannesburg high court over the termination of call rates that are set to start on the 1st of April. The […]

The new asymmetrical call rates that were proposed by ICASA mean that Vodacom and MTN will have to pay 44 cents per minute to smaller operators (Cell C and Telkom mobile) and the smaller operators will have to pay only 20 cents per minute.

The Citizen newspaper reported that MTN’s Wen Trengove, SC, argued that this was an unfair move. He went on to say that the company could lose R450 million in revenue if the new rates were implemented before a review of the rates regulations. “MTN and Vodacom customers will have to pay a higher rate to subsidise Cell C, Telkom Mobile, and their customers,” Trengove disputed.

According to money web, Vodacom argued that this was just a mere thumb suck and ICASA did not follow the due process when implementing this determination. On March the 3^rd, Telkom’s CEO Sipho Maseko wrote an open letter to MTN and Vodacom about the new pricing regime. The letter was published in most newspapers on Sunday.

In the letter Maseko reminded both companies’ CEOs that in 1994, when the mobile termination rates were introduced as a way for Telkom to subsidise MTN and Vodacom to build their networks, Telkom had to pay MTN and Vodacom significantly more than they (MTN AND Vodacom) paid Telkom for the same service. Maseko went on to say that lower mobile termination rates create a more equitable playing field and increase access to modern economy through expanded communication for all South Africans. He then claimed that the two giants were standing in the way of lowering mobile rates and standing in the way of SA’S future. The court resumes today as ICASA makes its submissions.