ICASA: On second thoughts, let’s do this MTR thing

“First you say you will, then you say you won’t”: no, music fans, it’s not Ella Fitzgerald. After announcing last Friday that ICASA would be suspending the planned implementation of new MTRs until May, following an application to the courts from MTN to stop them coming in to force on 1st March, ICASA’s just issued a statement saying that it’s changed its mind and it’s going to force operators into compliance by 1st April.

A Fool’s Day to remember?

To recap, MTRs are the charges that mobile operators bill each other to accept calls from a competitors’ network. The maximum MTR allowable is set by ICASA. In order to reduce the operating costs of smaller mobile networks – specifically Cell C and Telkom – ICASA has mandated that they must pay lower rates to connect to larger networks – Vodacom and MTN – than vice versa. The reason is that this will increase the ability of smaller networks to compete and thus make the overall telecoms market better for consumers.

MTN launched a legal challenge against this proposal last week, filing 399 pages of court papers outlining its case against ICASA’s plans. ICASA’s response was to delay the introduction of the new MTRs until 1st May, to give their lawyers time top digest the documents. Today’s surprising announcement, however, is that a newly confident ICASA has changed its mind and will push ahead.

‘Asymmetric’ MTRs like this have been used in other countries to promote competition in the mobile phone market where the operator perceives large companies who operate a near-monopoly are able to maintain dominance and skew prices simply by virtue of their size.

From ICASA’s statement today:

After further consideration and consultation with legal counsel, ICASA’s Council has decided that the commencement of the 2014 Regulations need only be delayed by one month. It is in the public interest that MTN’s application for interim relief be resolved as expeditiously as possible. After studying the papers, the Council of ICASA is also of the view that a delay of one month is sufficient to ensure that the affected parties have sufficient time to properly prepare their answering papers.

We’re waiting for MTN’s response. Cell C’s boss, Jose dos Santos, published an editorial outlining his company’s support for asymmetric MTRs in major newspapers on Monday, calling MTN “greedy”.

The rate due to be introduced would see Cell C and Telkom able to charge 44c per minute to the larger networks for connecting a call, while only paying 20c a minute in return. Those charges are set to be reduced annually, until by 2019 all operators will be allowed to set a maximum MTR of 10c.


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