Another run-around for the consumer

It's amazing - we get the news that finally cellular costs will go down only to be dealt another blow - delays, delays and more delays.

So, ICASA has announced that it will not accept the cellular providers' proposal on the lowering of interconnect fees by 29% by 1 March 2010. Now it would be very easy to get upset with ICASA here and say that they're delaying the process as they have done so many times in the past, but hang on! There's more to the story.

So the cellular operators agreed to a 29% reduction in interconnect rates by 1 March 2010, but as part of their proposal to ICASA insisted that ICASA agrees “to an undertaking not to review mobile termination rates until March 1 2013”. So, it's the cellular giants that are actually delaying the process by holding the regulatory body to ransom!

Why? Very simple. ICASA and the DoC have always said that interconnect rates need to come down dramatically as this is one of the reasons by telecommunications in South Africa is so expensive. So the initial discussions were around bringing these rates "dramatically".

My personal view - this scared the daylights out of the operators and their latest move is really their way of preventing sudden dramatic rate cuts.

From a business perspective one can understand as a large chunk of their revenues come from interconnect rates. So a sudden drop in this revenue will not make their shareholders very happy. But on the other hand, they have now played a very harsh card rather than trying to reach middle ground.

Will be interesting to see what ICASA's next step is. They remain “committed to releasing draft regulations on the effectiveness of competition in the wholesale call termination market in March”. So we wait with bated breath to see what the outcome will be.

I have to honestly say - hats off to ICASA for finally taking a stand against the giants. Let's hope there is a quick resolution on this however as we the consumer are still the losers at the end of the day!