Cape Town - The Independent Communications Authority of South Africa (Icasa) on Wednesday halved the fees mobile phone companies can charge rivals to use their network, part of plan to reduce call costs in Africa.
Icasa said the costs would be cut to 20 cents from 40c from March 1.
The costs will be further cut to 10c by March 2016, while the costs to fixed lines will also fall over the next three years.
Mobile Termination Rates (MTRs) are what mobile operators charge each other to allow rival traffic on their networks, much like a toll.
In SA, Icasa has been trying to drive down the cost of voice and data traffic and the regulator has used the reduction of MTRs as a mechanism to achieve this.
The MTR reductions announced are skewed to allow operators which have less than 20% of the market - namely Cell C and Telkom Mobile - the opportunity to be more aggressive on pricing than major players Vodacom and MTN.
The regulator is also responding to the Draft National Broadband policy finalised in late 2013 and due for implementation at the end of the first quarter 2014.
"While there is some vigorous competition among mobile operators in the sale of retail mobile data, and some resale by some of the larger ISPs, there is not significant scope for price competition without serious wholesale access regulation, and service providers tend to focus as a result on their valued added services to compete," the document says in relation to both mobile and fixed line broadband access.
The policy direction implies that the government will, through regulator intervention, drive competition to reduce data pricing to consumers.
"The data market has not been as effectively regulated as voice and the issues of wholesale access to fixed and mobile networks by competitors is a key issue in creating sufficient competition in data services to drive down prices," the document says.
Icasa said the costs would be cut to 20 cents from 40c from March 1.
The costs will be further cut to 10c by March 2016, while the costs to fixed lines will also fall over the next three years.
Mobile Termination Rates (MTRs) are what mobile operators charge each other to allow rival traffic on their networks, much like a toll.
In SA, Icasa has been trying to drive down the cost of voice and data traffic and the regulator has used the reduction of MTRs as a mechanism to achieve this.
The MTR reductions announced are skewed to allow operators which have less than 20% of the market - namely Cell C and Telkom Mobile - the opportunity to be more aggressive on pricing than major players Vodacom and MTN.
The regulator is also responding to the Draft National Broadband policy finalised in late 2013 and due for implementation at the end of the first quarter 2014.
"While there is some vigorous competition among mobile operators in the sale of retail mobile data, and some resale by some of the larger ISPs, there is not significant scope for price competition without serious wholesale access regulation, and service providers tend to focus as a result on their valued added services to compete," the document says in relation to both mobile and fixed line broadband access.
The policy direction implies that the government will, through regulator intervention, drive competition to reduce data pricing to consumers.
"The data market has not been as effectively regulated as voice and the issues of wholesale access to fixed and mobile networks by competitors is a key issue in creating sufficient competition in data services to drive down prices," the document says.