MTN undecided over tariff cuts

Johannesburg - Mobile telecommunications group MTN said on Friday it was revising a plan for the way forward on reducing interconnect tariffs, following bold statements from rivals Vodacom and Cell C about their intentions to cut fees.

The Independent Communications Authority of South Africa (Icasa) had earlier rejected the cellphone operators' proposal on the reduction of interconnect tariffs.

"MTN's intention is to implement the rates that have been the subject matter of much debate.

"There are however regulatory requirements to comply with, such as the appropriate determination by the regulatory authority that the interconnection amendment agreements comply with the regulations," said acting chief corporate service officer of MTN SA Robert Madzonga.

"We received a letter from the authority and note that the authority has expressed its concerns. MTN will attempt to address those concerns in the next few days," he said.

Proposal is 'legally indefensible'

Earlier this week, Cell C joined Vodacom in voicing its intentions to reduce tariffs in March.

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

Vodacom feels "the debate around glide paths or the formal regulatory process should delay the reduction in interconnection rates".

Icasa rejected a joint proposal by the cellphone operators, whereby peak-time interconnection rates would fall from 125c to 89c a minute in March this year, down to 85c in October 2011 and 80c in October 2012.

On Thursday Ismail Vadi, 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".

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

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

After rejecting the proposal, Icasa said it would first release draft regulations on the matter.

- I-Net Bridge