| 1.1. |
The Independent Communications Authority of South Africa ("ICASA or the Authority ") is enjoined in terms of section 2 of the Independent Communications Authority of South Africa Act, 2000 (Act No. 13 of 2000) ("ICASA Act "), amongst others, to regulate electronic communications in the public interest. |
| 1.2. |
The Authority undertook a review of the 2014 Call Termination Regulations1 in line with regulation 8 of the 2014 Call Termination Regulations, read with section 4(7)(b) and 67(8) of the Electronic Communications Act, 2005 (Act No. 36 of 2005) ("ECA"). |
| 1.3. |
The purpose of the call termination review was to assess competition in the provision of services in a market and to consider the appropriate form of ex ante regulation, if any, that should be imposed in this market to protect consumers from harm arising from market power. |
| 1.4. |
This reasons document sets out the Authority's reasons for the decision to amend the 2014 Call Termination Regulations. |
Key decisions:
| 1.5. |
The Call Termination Amendment Regulations, 20182 ("the final Regulations ") amend the 2014 Call Termination Regulations by revising the wholesale voice call termination rates as follows: |
| 1.5.1. |
for operators with more than a 20% share of total minutes terminated in the wholesale voice market, a glide path period— |
| 1.5.1.1. |
where a charge for terminating a call at a fixed location would be 0.09c from October 2018 to September 2019; 0.07c for the period October 2019 to September 2020; and 0.06c from October 2020 onwards. |
| 1.5.1.2. |
where a charge for terminating a call at a mobile location would be 0.12c from October 2018 to September 2019; 0.10c for the period October 2019 to September 2020; and 0.09c from October 2020 onwards. |
| 1.6. |
For operators with 20% or less share of total minutes terminated in the wholesale voice market, a glide path period— |
| 1.6.1. |
where a charge for terminating a call at a fixed location would be 0.10c from October 2018 to September 2019; 0.08c for the period October 2019 to September 2020; 0.06c from October 2020 onwards. |
| 1.6.2. |
where a charge for terminating a call at a mobile location would be 0.18c from October 2018 to September 2019; 0.16c for the period October 2019 to September 2020; and 0.13c from October 2020 onwards. |
| 1.7. |
Changes in termination rates to a fixed location were made after consideration of oral and written submissions by stakeholders. The rates as per the draft Call Termination Regulations3 resulted in an increasing asymmetric divergence between mobile termination rate ("MTR") and fixed termination rate ("FTR "). This divergence of termination rates between markets was argued to be prejudicial to small fixed operators. The prejudice would arise in that the rates exacerbate the financial strain that small fixed operators are placed under, given the market dynamics and flow of traffic between the two voice markets (larger volumes of calls placed from fixed to mobile locations than vice versa). |
| 1.8. |
To inform the determination of termination rates, the Authority looked beyond the scope of just the cost modelling results (i.e. cost of termination services) to consider a range of other contributing factors. These include, but are not limited to: |
| 1.8.1. |
the skewed competitive landscape; |
| 1.8.2. |
the convergent pressures on the mobile and fixed markets due to technological developments; |
| 1.8.3. |
regulatory consistency with past approaches; |
| 1.8.4. |
comparison with international precedent; |
| 1.8.5. |
objectives of the ECA; |
| 1.8.6. |
position of the Authority as expressed in the Findings document; |
| 1.8.7. |
inputs by stakeholders; and |
| 1.8.8. |
the overall South African economic context and social realities (cost to communicate). |
| 1.9. |
The proposed FTRs recommend that asymmetry between MTRs and FTRs remain constant for the duration of the 3-year glide path at 3 cents per minute. This is in line with the asymmetry between MTRs and FTRs in the 2014 Call Termination Regulations. |
| 1.10. |
Operators that benefitted from economies of scale and scope with a share of total minutes terminated in the wholesale voice call termination markets with more than 20% of total minutes terminated: |
| 1.10.1. |
to a mobile location as at 31 December 2016; or |
| 1.10.2. |
to a fixed location as at 31 December 2016; |
must comply with the publication of a Reference Interconnection Offer document and cost -based pricing by charging prices as specified in Schedule 7 of the Amendment to the Call Termination Regulations, 2014.
__________________________________
| 1 |
Published under Government Notice No 844 of 2014 (Government Gazette No. 38042), as amended by Government Notice No. 729 of 2017 (Government Gazette No. 41132) and Government Notice No 811 of 2017 (Government Gazette No. 41167). |
| 2 |
Published under Government Notice No 1016 of 2018 (Government Gazette No. 41943) |
| 3 |
Published under Government Notice No 489 of 2018 (Government Gazette No. 41845) |
Contingency Fees Act, 1997
