Interference by the Independent Communications Authority of SA (ICASA), in the current wholesale pricing regime, poses a threat to mobile market penetration and will hinder government's Accelerated and Shared Growth Initiative (ASGISA), says MTN.
Speaking at the public hearings held by the regulator on wholesale call termination, MTN's head of regulatory affairs, Nkataka Nyaka, said ICASA's "tampering" with the current wholesale pricing regime will take away revenues used to connect the poor.
ICASA is holding public hearings to determine interventions that are needed to bring down interconnection costs.
Nyaka says the problem is not whether a company is a significant market player, but what it does with its dominance to serve society.
He argues that MTN's pricing model allows it to provide connectivity for the unconnected poor. Twenty-five percent of MTN's subscriber base do not make calls and rely on incoming calls, with the rich subsidising connectivity for the poor. "The only people who are complaining about the regime are fat cats who are trying to protect their profits," he said.
MTN was, however, unable to provide clarity on what proportion of its revenues are being used to get the poor connected. The mobile operator also failed to provide an adequate response to ICASA panelist James Hodgekins' proposal that the reason a quarter of MTN's callers have to rely on wealthy relatives is because call costs are too high.
Internet Solutions' head of legal and regulatory affairs, Siyabonga Madyibi, said he was taken aback by MTN's "presumption" that the only way the unconnected can be provided services is if ICASA keeps its hands off the wholesale call termination market.
Arrogant
"I think that is an arrogant assumption that is based on the duopoly they enjoy and that they are the only operators that have a God-given right to provide mobile services. For operators to come here and pretend to be saviours of this market - I think that is arrogant."
Internet Solutions business development manager Geoff Rehmet says it is natural that MTN, like any corporate, would want to keep the status quo. The current regime enables MTN to generate R4 billion in revenue in interconnect fees, while Vodacom generates R6 billion.
Nyoka, however, argues that claims that interconnection rates have increased by 550%, with the per minute rate of R1.25, are untrue. That rate is only applicable to peak rates, and the effective rate is 92c, he said.
Ewan Sutherland, a consultant and former executive director of the International Telecommunications User Group, says even a 92c effective rate is too expensive. He adds that MTN's argument that it charges the rich more to connect the poor is not new. "They said that two years ago."
IS and Neotel urged ICASA to make sure its wholesale call termination investigation is procedurally sound, to ensure there is no room for litigation from dominant market players if the findings threaten their revenue streams.
Storm Telecoms and Sentech pulled out of the oral hearings. However, Sentech says it would like ICASA to take its written presentation into consideration. The hearings end tomorrow.
Related stories:
Telkom offers ADSL 'mixed blessing'
Share