Termination rates are the fees that operators charge each other to carry calls between their networks - and Icasa has proposed further significant reductions in the rates in the hopes of further driving down retail prices paid by consumers for phone calls.
Speaking at public hearings at Icasa's offices in Pretoria on Thursday, Lunga Siyo, head of Telkom's consumer division, and Mark Williams, a telecommunications consultant, argued that the approach to setting the draft call termination rates - these were published in the Government Gazette in March - ignored the impact on competition and could drive smaller operators out of business.
"Greater competition gives customers a wider variety of choice in terms of operators, and tends to drive efficiency in the industry," Siyo said. "It also helps the country accelerate the inclusion of everyone in society. With the new rates regime, Telkom could end up being a net out-payer and that might lead us to close shop."
Telkom criticised Icasa's decision to follow the approach of European regulators, which treated the fixed and mobile markets differently when it came to setting termination rates. The situation in South Africa is very different, said Telkom.
The proposed cuts to fixed-line termination rates are even more aggressive: from 6c/minute now, Icasa wants these reduced to 4c from 1 July 2024 and to just 1c from 1 July 2025 - a cut of 83% in just 15 months. (There is no asymmetry for smaller players in fixed call termination.)
