Cell C, Vodacom snub authorities

Johannesburg - Cellphone operators Cell C and Vodacom said on Thursday they would lower their tariffs next month, despite the Independent Communications Authority of SA's (Icasa) rejection of its proposals.

"In the interest of consumers and the country, Cell C is committed to the lowering of interconnection rates by 1 March 2010. We are actively engaging the relevant parties, including the department of communications, Icasa and our fellow operators," the company's chief executive officer Lars Reichelt said in a statement.

Vodacom would do the same.

"Vodacom is committed to the reduction of the interconnection rates as announced by the minister [of communications] in November last year," company chief executive officer Pieter Uys said.

"We do not believe that the debate around glide paths or the formal regulatory process should delay the reduction in interconnection rates."

Vodacom supported the initial reductions next month and would work with Icasa to achieve this.

"We also fully support the ongoing regulatory process and trust that Icasa will swiftly finalise the regulations in this regard," Uys said.

The mobile operators proposed a reduction in peak-time rates from R1.25 to 89 cents a minute in March, 85c a minute in October 2011 and 80c a minute in October 2012.

The current 77c for the off-peak interconnection rate would remain the same until 2013. The operators made the implementation of their proposal subject to the condition that Icasa undertook not to review mobile termination rates until March 1, 2013.

On Tuesday Icasa said it would not support the interconnection proposal and would first release draft regulations on the matter.

"These agreements sought to bind the authority to an undertaking not to review mobile termination rates until March 1, 2013," Icasa said in a statement.

"For this reason, the authority has decided not to review the interconnection amendment agreements as submitted."

Icasa planned to release its draft regulations on the matter in March 2010 and hoped these would lead to a reduction in charges and equitable access to existing networks.

Earlier on Thursday, the chairperson of Parliament's portfolio committee on communications said a proposed agreement by mobile operators to reduce interconnection rates was "legally indefensible" and "wrong in law".

Ismail Vadi said the "practical effect" of the proposed agreement would be to tie Icasa's hands and prevent it from discharging its lawful responsibilities.

"The portfolio committee on communications believes that clause five of the proposed interconnection agreement tabled by mobile operators (Cell C, Vodacom and MTN) with Icasa is wrong in law," he said.

"At best, it represents an attempt by operators to pre-determine interconnection rates for a prolonged period, which is both unreasonable and legally indefensible."

Vadi said the committee believed that its original proposal of an immediate reduction in the interconnection rates to 60c "is desirable".

It accepted, however, the suggested cut to 89c as an interim measure that could be implemented by March 1, after endorsement by Icasa.

Vadi said there should be no conditions attached to this interim measure.

"While the committee supports in principle the concept of a glide path, the precise rates and timeframes should rightfully be determined by Icasa," he said.

"The committee urges Icasa to undertake its investigation into interconnection rates professionally and to meticulously follow the procedures set out in chapter ten of the Electronic Communications Act, so that its final determination on this matter can be defended legally, if need be."

After President Jacob Zuma's State of the Nation address, the committee intends inviting Icasa to receive a progress report on its work in respect of interconnection rates.

The agreement with the mobile operators was welcomed by Communications Minister Siphiwe Nyanda and Independent Democrats leader Patricia de Lille when it was reached in November last year.

"This... is putting money back in the pockets of ordinary South Africans who need it more now than ever," Nyanda said in the National Assembly.

De Lille said the announcement was "Parliament's Christmas gift to the nation".

"Our success has translated into savings of billions of rand and will have an impact on the life of almost every single South African," she said.

But earlier this week Nyanda and de Lille had harsh words for the operators.

"It's the minister's view that the proposed three year glide path period is long and unfair to consumers who have been affected by high telecommunication costs for too long," Nyanda said in a statement.

"The ministry believes that the 89/77c (peak and off-peak respectively) are reasonable were they to be implemented within a shorter period than that suggested by the mobile operators."

De Lille said the proposed reduction was "pathetic" and "insulting" to Parliament and the people of South Africa.

"When their [chief executive officers] appeared before our communication portfolio committee in Parliament there was no talk of conditions," De Lille said.

- Sapa