South Africa’s Internet Service Providers’ Association (ISPA) has called upon mobile operators MTN and Vodacom, and the Independent Communications Authority of South Africa (ICASA), to quickly resolve the legal dispute regarding the new mobile termination rate (MTR) regulations, given the “politically inconvenient” timing of the quarrel.
ISPA said it supports the regulator’s attempts to lower MTR rates and fuel competition in the market, however, it said it is important to acknowledge there may be contrasting views on how to achieve the increase in competition.
Saying the dispute comes at a “politically inconvenient time” – ahead of the national elections scheduled for May 7 – ISPA said the parties should quickly negotiate an outcome out of court, to prevent significant detriment to the telecoms sector in South Africa.
“With regards to the urgent interdicts sought by MTN and Vodacom, should they be granted the implementation of the new glide path will be delayed at a politically inconvenient time and it will undoubtedly delay the creation of a more competitive landscape,” said ISPA.
“The delay could be substantial, a result which is not in the interests of the South African consumer or economy.
“Given these considerations ISPA urges the parties to the current dispute to take extraordinary measures to reach a negotiated solution outside of the court process.”
Nonetheless, ISPA said an outcome to the legal cases will be important in due course, as it will demarcate the boundaries between the regulator and industry players.
“Whatever the outcome, the matter before the courts is important because it is likely to redraw the rules of engagement between the regulator and the regulated and between the policy-maker and industry. This shake-up will be long overdue,” said Dominic Cull, ISPA regulatory advisor.
HumanIPO reported MTN and Vodacom launched legal challenges to the new MTR regulations as announced by ICASA in January, with the operators claiming the regulator did not follow statutory due process in deciding the new rates and asymmetric pricing.
ISPA said the cases should proceed, as the right to a fair and transparent legal review of regulations must be upheld.
“ISPA’s members have an interest in and support fair and transparent regulatory processes and the rights of affected parties to seek the review of this action where they hold a good faith view that the required standards have not been met,” the association said.
The association said MTN and Vodacom are acting “in a rational manner for profit seeking entities”, while the issue is being politicised by the department and minister of communications – who are getting vocally involved in the issue.
For ICASA’s part, ISPA said the regulator appears to feel there is a need to break down an apparent duopoly in the market.
“ICASA’s intervention is more directly linked to the continued existence of what it regards as a mobile services duopoly and ICASA’s position that introducing greater competition will lead to lower prices,” said Cull.
“This follows from ICASA’s assessment of market and revenue share between the mobile networks, its conclusion that there is market failure and its view that the 2010 glide path and asymmetry have not remedied the market failure sufficiently.”
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