Icasa keeps close eye on MTN

Johannesburg - The Independent Communications Authority of South Africa (Icasa) said on Wednesday that it was keeping a close eye on a proposed deal between MTN and Indian telecommunications giant Bharti Airtel.

They added if the transaction involves changes in shares, it needed to notify the authority before the transaction continued.

Speaking to I-Net Bridge about a proposed merger, Icasa spokesperson Sekgoela Sekgoela said: "Icasa is keeping a close eye on the developments of this transaction, and will as soon as it has established its own facts about the deal of this transaction, communicate with MTN.

"MTN's licence is clear, if the transaction involves change in shares, it needs to notify the authority before the transaction is continued. Once the authority has that information [details on the share transaction] it can determine whether the transaction will need to be subject to a public process or not - it cannot do so until it has all the facts before it."

MTN recently announced that it had extended the exclusivity agreement with Bharti Airtel regarding a potential transaction until September 30.

Bharti Airtel and MTN are engaged in talks on a deal that would see India's largest cellphone company merge with MTN to create the world's third-largest cellphone company, with annual revenues of $20bn and more than 200 million subscribers.

They are discussing a merger estimated to be worth $23bn in a stock and cash transaction. The deal proposes that Bharti take a 49% stake in MTN, which in turn would get 36% of Bharti.

Regarding interconnect fees, Icasa said it expected the first report- back on progress regarding mobile termination rates on October 9.

The communications watchdog said it had met with representatives of Vodacom, MTN, Cell C, Neotel, Telkom and the Internet Services Providers Association (ISPA) last week, where it was agreed that industry would review its position on termination rates, currently deemed to be exorbitant.

Icasa then met again with industry representatives earlier in the week where it was agreed that the focus for any negotiations would be the mobile termination rate.

The mobile termination rate is the fee that one network charges another for terminating or completing calls on its network.

However, MPs have proposed that the mobile and fixed line telephone operators drop their interconnection rates from the beginning of November to 60 cents a minute during peak times.

The communications committee, which was briefed by both Icasa and the Department of Communications yesterday, said that interconnection rates in South Africa set at R1.25 per minute during peak times are exorbitant and excessive, resulting in extremely high telecommunication prices.

- I-Net Bridge