PRESS RELEASE: Vodacom supports reduction in mobile termination rates, raises concerns on asymmetry
The following statement is in response to the draft call termination regulations published by ICASA on 4 October 2013. For clarity, the proposed changes are related to the fees that operators charge each other for terminating (connecting) calls and not to retail rates.
Shameel Joosub, Vodacom Group CEO said: "We support ICASA's goal of reducing mobile termination rates, provided that such a reduction is cost-based. Cuts in mobile termination rates can have a profound impact on both our business and those of our suppliers, franchisees and other stakeholders. We therefore support a managed 'glide path' of reductions over several years. We will be responding to ICASA to make the case that the proposed reduction and glide path, which has an initial drop of 50% in March 2014, are too steep and could have serious negative impacts.
"The second part of the proposed changes involves an increase in asymmetry. Asymmetry means that Vodacom pays more to connect a voice call to someone on Cell C or Telkom Mobile than these networks pay to connect to someone using Vodacom.. The proposed changes take the current rate of asymmetry from a 10% differential to rates ranging between 95% and 160% over three years. The accepted practice worldwide is declining asymmetry for a limited period for new entrants at a fraction of the levels proposed. We intend to engage with ICASA on this point to motivate for a more reasonable outcome. We see this proposed asymmetry as placing Vodacom (and by extension, our customers) in the position of effectively subsidising our competitors."
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