Telkom has reiterated that the proposed voice call termination rates will work against smaller mobile operators.
The company made the remarks on Friday, when it published its integrated report for the year ended 31 March.
In March, the Independent Communications Authority of South Africa (ICASA) published the draft amendments to the Call Termination Regulations, of 2014 and 2018, for public comment.
Voice call termination is the service that one network offers another to carry voice traffic to its end-users. The charge for this service has been the subject of concern, where it has been viewed as a constraint to effective competition, as well as a driver of high telecoms retail prices in South Africa.
The telecoms regulator notes these amendments are part of the broader measures to reduce the cost to communicate.
The regulator said in a recent notice that it wants mobile termination rates slashed from 9c/minute excluding VAT (13c for smaller operators), to 7c (9c) on 1 July 2024 and 4c (4c) on 1 July 2025.
Commenting on the proposals, Telkom group CEO Serame Taukobong says in FY2024, the company continued improving its engagement with regulators on key matters.
“In the draft regulations, ICASA proposed the removal of asymmetrical rates for smaller operators over two years,” says Taukobong.
“In our view, this will not promote competition but rather entrench the currently skewed market structure. The draft regulations also included provisions that purport to regulate termination rates for calls originating outside South Africa.”
Cell C CEO Jorge Mendes recently raised similar concerns, telling ITWeb TV that the call termination rates proposed by ICASA must be pushed back by at least three years.
Telkom says it believes ICASA’s attempts to prescribe termination rates for international calls will limit the negotiating power of local operators when dealing with international operators.
The company notes ICASA held public hearings in June and engaged stakeholders on alternative glide paths, among other matters.
“We had positive engagements with ICASA regarding our concerns and await further updates on the revised regulations and implementation dates,” Taukobong notes.
“We welcome ICASA’s commitment to implement a lower cost standard and trust that the new glide path will have pro-competitive outcomes, stimulate economic development through fair competition and reduce communication costs.”
Telkom adds in the report that the switch-off process for the frequency spectrum above 694MHz was finally concluded by 30 September 2023.
After the final broadcasting interference was cleared, the sub-1GHz spectrum obtained in the auction concluded in March 2022 was made available nationally for deployment of mobile systems, it notes.
For Telkom, this has contributed to an improved customer experience and increased operational efficiency. Telkom paid its final auction fee of R972 million to ICASA in December 2023 for the 2x10MHz in the 800MHz band.
ICASA indicated the second spectrum auction will take place in FY2026 and preparations for the auction will continue during FY2025.
Telkom points out that the Department of Communications and Digital Technologies published the proposed Electronic Communications Amendment Bill 2022, in June 2023.
The Bill deals with critical matters, such as spectrum trading and sharing, roaming, mobile virtual network operators, passive infrastructure, competition and facilities access.
“We have outlined our concerns regarding the Bill in a comprehensive response submitted in August 2023. A key concern includes the insertion of proposed new licence categories applicable to electronic communications facility services and community networks which are already defined and are licensed under the current Electronic Communications Act, 2005,” says Taukobong.
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