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Icasa hearings could cut call costs2007-05-15 The first step in a long process that may see telecoms companies cutting interconnectivity charges begins on Wednesday. The Independent Communications Authority of South Africa (Icasa) will be holding public hearings to discuss wholesale call termination this week. Call termination refers to the "handing off" or routing of calls from one network operator to another. It is part of the interconnection between network operators. In 2005, Icasa launched a discussion document examining cellphone pricing in South Africa. The inquiry was suspended when the new Electronic Communications Act came into force, as it required that certain steps be taken before regulation of a market can be undertaken. Icasa subsequently gazetted a discussion document earlier in the year on wholesale call termination. According to the Electronic Communications Act, Icasa is required to define relevant markets for regulation purposes and evaluate the competitiveness of the markets. "Markets have to be identified and defined, significant market power has to be found and only then can pro-competitive measures, if necessary, be imposed," Tracy Cohen, councillor for markets and competition at Icasa said on Friday. This is so that there is appropriate regulation and also to understand the competitive dynamics of markets. The discussion document on wholesale call termination is the first of a series of discussion documents defining wholesale and retail markets that has been published by Icasa this year. There is more to come including fixed-line narrowband exchange line, call origination, and call conveyance and leased lines. Icasa is faced with the task of ensuring that prices for communication services are reduced in South Africa. It has looked at practices in other countries and says that cost based pricing will begin to reduce the costs of calls, while still ensuring profitability for operators. Icasa also analysed call termination in Tanzania, Nigeria and Uganda where Vodacom and MTN operate and found that call termination in those countries is cheaper than in South Africa even if traffic volumes and subscriber numbers are higher in South Africa than in those countries. In Nigeria interconnection rates were lowered 36% in 2003. Interconnection fees in Nigeria and Tanzania are 59c, and 36c respectively and 58c in Uganda. This is significantly lower than South Africa's R1,25. Icasa says that if call termination is cost based, there will be effective competition in the retail market and this will ensure lower prices for consumers. The hearings on wholesale call termination begin on Wednesday with presentations from Telfree, Neotel, MTN, IS and Sentech. Source: My Broadband |
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