The Independent Communications Authority of South Africa (Icasa) has finalised amendments to its call termination rate regulations, marking a significant step toward more affordable communication for South Africans. Published in the Government Gazette, the updated framework introduces a slower, yet still impactful, reduction in inter-network call fees. This strategic approach aims to balance consumer affordability, industry competitiveness, and market sustainability.
What Are Call Termination Rates?
Call termination rates are the fees telecom operators charge each other to connect calls across their networks. Over the past two decades, these rates have been steadily reduced to promote accessibility and affordability. The latest amendments by Icasa continue this trend, albeit with a revised timeline to accommodate industry realities.
Revised Glide Path for Reductions
For large mobile operators, the current rate of 9c per minute will decrease to 7c in July 2025, 5c in 2026, and 4c in 2027. Smaller operators, currently at 13c per minute, will follow a similar schedule, aligning with the 4c target by 2027. Fixed-line operators, on the other hand, will see their rates drop from 6c to as low as 1c per minute by the same year.
New entrants to the market will benefit from slightly higher allowed rates during their first three years, offering them a competitive edge as they establish themselves.
The Debate Around Asymmetry
A key point of contention in the revised regulations is the removal of asymmetric pricing between large and small operators, with Icasa reserving this privilege for new players only. While this measure aims to level the competitive playing field, smaller operators like Telkom and Cell C have expressed concerns. They argue that the lack of asymmetry could lead to revenue losses for smaller players while strengthening the dominance of market leaders.
Telkom and Cell C have also raised questions about whether these changes will directly benefit consumers, highlighting the need for careful implementation to prevent unintended consequences, such as reduced competition or higher retail prices.
Alignment with Broader Goals
Icasa’s decision was guided by several factors, including cost modelling, global benchmarks, technological advancements, and the objectives of South Africa’s Electronic Communications Act. The regulator emphasized that these amendments are part of a broader strategy to reduce communication costs and create a fairer telecoms market.
What It Means for Consumers
For consumers, the ultimate goal of these changes is cheaper call rates. By reducing the cost of inter-network connections, Icasa hopes to stimulate competitive pricing among operators, leading to savings for end-users. While it may take time for these benefits to materialize, the amendments set the stage for a more affordable and inclusive telecoms environment.
Icasa’s revised termination rate regulations represent a critical step forward for the South African telecoms sector. By addressing market imbalances and creating opportunities for new entrants, the regulator aims to drive innovation and affordability in the industry. However, the success of these measures will depend on how operators adapt and whether the intended consumer benefits are fully realized in the coming years.
