Cellphone network operators MTN and Vodacom took their fight against the introduction of new call termination rates to the High Court in Johannesburg on Tuesday (25/03/2014).
The Independent Communications Authority of SA (Icasa) has conceded there are problems with its proposed model for mobile termination rates.
These are the rates that operators have to pay one another for calls to other networks.
Icasa wants to implement a set of regulations that will see these rates dropped to 10 cents per minute in 2016.
For 2014, however, MTN and Vodacom will have to pay 44c a minute to smaller operators, while the smaller companies will have to pay only 20c.
MTN and Vodacom want the 2014 regulations scrapped. Alternatively, they want interim relief to prevent the introduction of the new rates until they have been reviewed.
Wim Trengove, SC, for MTN, argued it was unfair to make the rates asymmetrical beyond newcomers to the mobile market.
If the proposed regulations were implemented from April 1, the smaller operators would effectively be receiving a subsidy.
“MTN and Vodacom customers will have to pay a higher rate to subsidise Cell C, Telkom Mobile, and their customers,” Trengove argued.
There were also questions about how Icasa had arrived at the proposed rates, which it claimed would stimulate competition in the mobile market.
Trengove said MTN could lose R450 million in revenue if the new rates were implemented before a review of the rates regulations, which could last around six months.
Alfred Cocknell, SC, also for MTN, argued there were issues of procedural fairness in Icasa’s dealing with the regulations.
He said MTN had sought to make submissions on the draft regulations, but was not given the relevant information to make meaningful submissions.
MTN asked for the costing study and regional or global benchmarking studies that informed the regulations.
“Icasa refused to give these.”
Icasa refused to reveal the method it used to arrive at the new rates, which Cocknell referred to as a “black box”.
“My client could not make a meaningful submission without that black box.”
Cocknell said there could be significant changes to the structure of the market if the court did not grant the application. – Sapa