MTN, Vodacom agree on fee cut

Johannesburg - Cellphone operators MTN and Vodacom on Friday confirmed an agreement to lower termination rates by about 19%.

"MTN SA can confirm that an agreement has been reached with Vodacom, and is pursuing bilateral negotiations with Cell C and other operators," the firm said.

In a seperate statement, Vodacom said the agreement proposes a blended interconnection rate of 78c which declines to 61c on a glide path.

"However, it is with regret that no agreement has been reached with Cell C at this stage," MTN said.

The bilateral negotiations took place in terms of the regulations by the Independent Communications Authority of South Africa (Icasa), which had oversight over the process, the group added.

"In terms of the agreement, the parties proposed approximately 19% immediate reduction of the blended wholesale interconnect tariffs, with further reductions year-on-year for the following three years.

"This reduction cycle will enable MTN SA to make the necessary changes to its operations and long-term commitments to reflect the decrease in interconnect rates.

"In terms of due process, the two parties will now need to lodge the agreement with Icasa for their regulatory oversight. MTN is pleased that progress has been made in the negotiations, and will continue to engage in good faith with other parties as part of the Icasa process to resolve outstanding interconnect agreements," MTN concluded.

The announcement comes in the wake of public hearings held by the National Assembly's communications committee last week, when MPs and others urged the mobile networks to cut their interconnect fees to help make communications more affordable. - I-Net Bridge