Icasa gives nod to rate cuts

2010-02-11 08:40

Johannesburg - The Independent Communications Authority of SA (Icasa) has approved a cut in the rate charged by the three main cellphone operators to connect calls between networks, Business Day reported on Thursday.

Vodacom [JSE:VOD], MTN [JSE:MTN] and Cell C last month filed an agreement with Icasa proposing a cut in the peak interconnection rate from R1.25 to 89 cents on March 1.

Icasa rejected the plan because it would have forced it to agree to a fixed gradual reduction over three years.

The operators submitted revised agreements without the "glide path" on Monday and Tuesday.

With the approval of those proposals, the peak rate will fall on March 1, as initially planned.

Icasa said the rate reduction must be passed on to consumers. It also plans to release draft call termination regulations next month.

MTN's Robert Madzonga said the speed of Icasa's response was commendable.

"We will immediately start making all the necessary technical changes to ensure the rates come down on March 1."

A Vodacom spokesperson said the company was pleased the matter had been handled quickly.

Lars Reichelt, CEO of Cell C, said the company had "championed this cause in the interest of consumers and believes it is a significant step forward in creating more competition in the market".

- Sapa