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Interconnect regulations published

By Damaria Senne, ITWeb senior journalist
Johannesburg, 27 Jul 2007

The Independent Communications Authority of SA (ICASA) has gazetted draft interconnect regulations.

The document also calls for ICT stakeholders to provide written comment by 3 September.

The regulations outline the terms and conditions under which communications providers will interconnect with each other. The regulator also says it will review existing interconnection agreements, and there will be no claims of confidentiality allowed.

ICT stakeholders and market watchers consider interconnect prices to be the last barrier to lower telecoms costs in SA.

Cell C says lower interconnection rates will give it the necessary room, as the late entrant, to compete on an effective basis.

Legal case brewing?

The draft regulations state that interconnection pricing will be cost-based. Charges for interconnection must also be sufficiently unbundled so the party seeking interconnection does not have to pay for items it does not deem necessary.

ICASA will also exercise its power to declare which are the dominant market players. The interconnection guidelines stated Telkom, Vodacom and MTN would be declared significant market players.

BMI-Techknowledge says SA's major telecoms players would not take the new interconnection regime lying down. Head of research Brian Neilsen says Telkom, Vodacom and MTN would probably challenge the interconnection regulations once they were finalised. "It will be the first test case for ICASA and it's going to be a big battle," he said.

Vodacom and MTN informed ICASA during the interconnection hearings earlier this year that the regulator's interference in interconnection matters could harm government's Accelerated and Shared Growth Initiative. Both parties argued that revenue from high usage subscribers also served to subsidise low-income subscribers. Both parties also argued there was no market breakdown that allows ICASA to interfere with commercial arrangements between operators.

Africa Analysis analyst Dobek Pater says consumers may not benefit as strongly from a new interconnection regime as expected.

"Government may have the expectation it will pass the cost savings to consumers, but ultimately, it is their [the operators'] final decision to do so," he says.

Related stories:
ICASA interference will hinder ASGISA
Report urges interconnection caution
Interconnection kills the VOIP star?
ICASA probes mobile market failure
Interconnection moves could disappoint
New round of interconnection hearings

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