MTN and Vodacom’s “commercial” intentions, as well as the “burden” carried by the Independent Communications Authority of South Africa (ICASA) to spur market competition supported the High Court decision to temporarily implement the mobile termination rate (MTR) regulations even though it declared them invalid.
HumanIPO reported yesterday the High Court of South Gauteng ruled the MTR regulations published by ICASA in January were “invalid and unlawful”, finding in favour of claims by MTN and Vodacom that the regulations were arrived at without following statutory procedural requirements.
Nonetheless, the court ruled that in the public interest the new rates contained in the regulations will take effect as of today, for a six month period, pending further review.
Explaining its decision to suspend the invalidity of the regulations and allow them to take effect for six months, the court said MTN and Vodacom as highly profitable businesses are driven by “commercial considerations” and their potential loss of profit should be weighed against the importance of spurring market competition.
“A further consideration favouring suspension on the basis of my discretion is the fact that MTN and Vodacom are both very profitable companies, motivated in these proceedings primarily, if not exclusively, by commercial considerations,” the court said.
“…in the present case, the only prejudice, which flows from an infringement to the right to fair administrative action, appears to be a loss of revenue for MTN and Vodacom,” the judgment said.
“This potential loss of revenue has to be weighed against the likelihood of a price war triggered by Cell C and Telkom Mobile, which will benefit the public if the Amended 2014 Regulations come into force, even for a limited period.”
In addition, the court said, ICASA carries a heavy responsibility, namely, it must fulfil the task of instigating competition in the established market, and as such the regulator must be afforded time to properly review the possibilities open to it in achieving its goals.
Highlighting the need for a cost-oriented set of regulations designed to decrease the overall cost of communications, the court said MTN and Vodacom have both accepted for the past three years the cost-based approach on which the previous (2010) regulations rested, adding all the parties to the current case accept the need for MTRs to balance out market factors such as high costs of mobile phones.
“…it was effectively explained by ICASA that the implementation of the 2010 Regulations promoted competition, lowered costs and facilitated access to affordable telephony for the majority of the population in all spheres of their lives including of course, economic activity, education, access to essential services such as health emergencies, social grants and the like,” the court said.
“The importance of such affordable access to telephony to indigent members of our population, particularly in remote rural areas, can hardly be disputed.”
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