The country’s communications watchdog needs to make bolder decisions in its call termination regulations to assist smaller operators to compete with the two biggest rivals – Vodacom and MTN.
On Thursday ICASA, South Africa’s telephone regulator, proposed to cut the fees charged by Vodacom, MTN, Cell C and Telkom to handle calls from other providers, a move that could hit revenues for phone firms and pave way for cheaper calls.
It proposed that asymmetry for small players, which impacts Cell C and new entrants for the duration of the three-year glide path to be at 5c from October 2018 to September 2020 and 4c from October 2020 onwards.
Cell C said on Friday it was still reviewing and calculating the effect of the draft call termination regulations on its business.
The company added that although it is pleased that ICASA has determined that the voice call termination market is still not competitive and requires remedies that include the imposition of asymmetry for smaller operators, it believed that the modelling exercise done by ICASA can and should provide for increased asymmetry than is currently proposed in the draft regulations in order to address this historic and continuing imbalance that favours dominant operators.
“Cell C encourages ICASA to make bold decisions in this important matter by determining a wider asymmetry than that currently proposed in the draft regulations,” says Cell C CEO Jose Dos Santos.
Asymmetric regulation definitely assists smaller operators and ultimately results in a reduction in retail prices when the competitive position of these smaller operators is enhanced.
Despite their ongoing protestations, asymmetry has little to no effect on dominant operators, due mainly to the fact that only a tiny proportion of their overall voice traffic is actually affected by this asymmetric rate. In this context, there is no harm and only a benefit in providing a regulatory framework with as much asymmetry as possible.
Anything less will continue to support the current market structure and excessive dominance displayed by Vodacom and MTN who, as history has shown, do not reduce prices unless their smaller competitors lead the way.