SA’s telecommunications regulator has gazetted new call termination regulations that aim to cut voice communication costs.
The regulations received pushback from Telkom and Cell C, SA’s third- and fourth-biggest mobile operators, earlier this year.
Operators have previously made a lot of money charging for calls between networks. But new rules from the Independent Communications Authority of SA (Icasa) will see call termination rates drop.
Icasa, which intends to enforce the new rules from July next year says this is one of a set of measures to reduce the cost to communicate. In essence, the new regulations reduce the costs of making calls to subscribers on other operators’ networks. From a competition perspective, the lower the termination rates, the better it is for smaller operators.
On Tuesday, Icasa revealed that the rules were now in effect, having been originally gazetted on November 26, according to a document signed by chair Mothibi Ramusi. The authority had initially hoped to enforce these from July this year.
The large mobile operators now charge 9c per minute to terminate a call on another operator’s network. Icasa says this will be reduced to 7c in July 2025, 5c in July 2026, ultimately coming down to 4c in July 2027.
Small players now charge 13c per minute, which is set to go down to 9c in July 2025, 5c in July 2026 and 4c in July 2027.
While good news for some, in June Cell C said it did not believe the new termination regulations would work, arguing that the move would favour Vodacom and MTN.
“We are almost certain that if this regulation gets passed and asymmetry gets taken away and it becomes level, you will not see a price reduction at all by the two bigger players. It will simply be an improvement of margins and therefore you have weakened the market in terms of [the] competition landscape,” Cell C boss Jorge Mendes told Business Day at the time.
While voice revenue has been in decline across the industry as people make more calls via the internet using data, Cell C still sees this bit of business as large enough to protect.
Mendes said 53% of Cell C’s active customers were still using the service, making the revenue that comes from it significant.
“This kind of thing would remove [more than] R200m in revenue from a player such as Cell C.”
Telkom attacked the new rules by saying they unfairly prejudiced its fixed-line business.
It said it was concerned about Icasa’s decision to not align the fixed termination rate with the mobile termination rate, “but rather to drastically reduce the fixed termination rate to a rate which is significantly lower than the mobile termination rate”.
All operators pay 6c a minute for calls to a fixed device. This is set to decrease to 5c in July 2025, 4c in July 2026 and 1c in July 2027.
The state-affiliated operator said this was especially concerning while “the distinction between fixed and mobile calls, from both operator and consumer perspectives, is blurring and fixed-mobile substitution in the voice market is increasing”.
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