South Africa’s leading mobile operators Vodacom and MTN feel “vindicated” by yesterday’s court decision ruling the mobile termination rate (MTR) regulations set out by the Independent Communications Authority of South Africa (ICASA) to be “invalid and unlawful”, while rival Cell C bemoaned the operators’ attempt to “frustrate” market competition.
HumanIPO reported yesterday the High Court in Johannesburg ruled in favour of Vodacom and MTN following their legal challenges against ICASA, saying the MTR regulations published by ICASA in January were “invalid and unlawful”, although the court exercised its discretion in the public interest by allowing the regulations to become effective as of today, for a period of six months.
MTN and Vodacom had argued ICASA did not follow requisite procedures in deciding on the reduced MTR costs contained in the new regulations, which provide for immediate 50 per cent rate cuts, as well as asymmetric billing to the detriment of larger operators.
Vodacom and MTN said the ruling vindicates their decisions to launch legal challenges to the regulations, noting they will now review their options.
“MTN is pleased with the South Gauteng High Court’s decision to grant a final judicial review order with respect to the Call Termination Regulation 2014 as published by the Independent Communications Authority of South Africa (ICASA),” said Zunaid Bulbulia, chief executive officer (CEO) of MTN South Africa.
“MTN has been vindicated in its decision to take the matter on urgent review and request a final order. MTN now awaits a copy of the written judgment whereafter it will consider its options going forward.”
Vodacom spokesperson Richard Boorman said: “Our legal challenge has been justified – the view that the call termination regulations are unlawful has been vindicated. We’re studying the decision and will comment in more detail in due course.”
Rival smaller operator Cell C said it welcomed the immediate drop in rates allowed for the six month period, however, the company is disappointed with the success of MTN and Vodacom’s attempts to “frustrate” increased competition and lower consumer prices.
“Cell C believes the ruling made by Judge Mayat on the Mobile Termination Rates (MTR) Regulation, whereby the 2014 rates will be implemented for six months, is a step in the right direction and is positive for the consumer and the South African economy as a whole,” said Jose dos Santos, acting CEO of Cell C.
“Unfortunately, Vodacom and MTN have managed to frustrate the long-term process envisaged by ICASA to increase competition in the market, which would have resulted in lower prices for consumers in the long run.
“The uncertainty over MTRs over the next three years will continue to make it difficult for smaller operators to confirm their business plans beyond October 2014. It also negatively impacts on the smaller operators’ ability to bring down prices to ensure all South Africans have access to affordable communications.
“Cell C will continue to cooperate with ICASA so that it can fulfill its mandate to regulate effectively to increase sustainable competition in the telecommunications sector and thereby ultimately to reduce the cost to communicate in South Africa for the benefit of consumers and the economy at large. We trust that Vodacom and MTN will do the same.”
Part state-owned operator Telkom also welcomed the ruling, which the company believes is “in the best interest of the industry and will go far in reducing the cost to communicate for consumers and stimulating competition in the industry”.
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