The Independent Communications Authority of South Africa (Icasa) said late last month that it had finalised the long-awaited and much-disputed mobile termination rates (MTRs) set to direct the interconnect rates charged by mobile operators until September 2017.

The regulator started a new six-month process to review the wholesale voice call-termination markets after its 2013 glide path had been declared “invalid and unlawful” by the South Gauteng High Court in March.

A suspended judgment allowed an initial termination rate of 20c and an asymmetric rate of 44c to be implemented from April tol September this year.

After Icasa had engaged affected and interested stakeholders over the past six months to obtain market and cost-related information, as well as meeting the court-imposed deadline of September 30, the new glide path would see MTRs eventually cut to 13c, with an asymmetry of 19c to be charged by smaller players by October 2016, Icasa councilor Nomvuyiso Batyi said.

She explained that the MTRs would remain at the 20c rate implemented in April, with an asymmetry rate reduced from the initial 44c to 31c, at the start of the new glide path from October 2014 to September 2015. Following this, the MTR would decline to 16c, with an asymmetry of 24c until the end of September 2016, before dropping to its final rate in the third year.

“While we believe that this is a significant step towards making voice services more accessible to all South Africans, we must caution consumers that retail rates do not, in all instances, come down with a drop in the termination rates,” Batyi added.

However, the authority assured that it did see an “almost immediate” drop in retail rates by some operators after the implementation of the previous glide path, which was tabled in 2010.

Batyi noted that, while Icasa planned to disclose the full reasons for its decisions in due course, it had considered the current market conditions, prevailing economic conditions, the state of competition in the relevant markets and the operators’ costs for providing the voice services.

The authority adopted a dual approach to determining the rates, with the top-down model, using each operators’ actual costs to determine the rates, constituting the base rate for October 2014. The bottom-up model, using the costs of an efficient operator to determine the MTRs, would be the basis for the target rate of 2017.

The asymmetry rate for smaller operators and new entrants, set to facilitate competition in the industry, would be limited to the current regulatory period until September 2017.

The new rates were revised from the draft call termination rates published early in September, in which Icasa outlined a final reduction to 8c, with an asymmetry of 10c, by 2018.

Icasa had initially proposed cuts to 16c, with an asymmetry rate of 22c, from October to February 2015, after maintaining the MTR at 20c in the first 12 months with an asymmetry rate of 30c.

The authority had, in the draft, planned to reduce the MTRs to 12c in March 2016 and 8c in March 2017, with asymmetry rates steadily reducing to 16c in March 2016 and 10c from March 2017 to the end of February 2018.

The authority suggested that a review of the regulations was imminent after two years.