ISPA Challenges ICASA’s Proposal to Slash Fixed Line Call Termination Rates

The Internet Service Providers’ Association (ISPA) has raised concerns over the plan put forth by the Independent Communications Authority of South Africa (ICASA) to reduce call termination rates for fixed lines to a mere 1 cent per minute.

ISPA is advocating for ICASA to adopt a unified pricing structure for both fixed and mobile call termination, arguing that the current system of disparate rates unfairly burdens telecom consumers.

Call termination rates represent the charges levied by network operators for connecting calls from competitors to their subscribers.

ISPA emphasized the significance of scrutinizing these costs, noting that they typically get transferred to end-users within the telecommunications sector.

In recent developments, ICASA released draft amendments to its call termination rate regulations, proposing aggressive rate reductions over the next two years.

However, ISPA contends that ICASA’s decision not to align South Africa’s fixed and mobile termination rates contradicts its own prior findings.

In 2022, ICASA acknowledged the increasing convergence between fixed and mobile technologies, largely driven by the COVID-19 pandemic.

Switch Telecoms, an ISPA member and voice over IP provider, expressed concerns over the exceptionally low fixed termination rate (FTR) of 1 cent per minute proposed by ICASA. They highlighted that such a rate is significantly lower than those observed in highly developed markets and fails to account for South Africa’s unique geographic challenges.

Moreover, the additional burden of load-shedding exacerbates the cost of providing reliable telecommunications services in the country.

Telkom, South Africa’s primary fixed line operator, has also voiced discontent over ICASA’s decision to implement asymmetrical cuts to fixed and mobile termination rates.

ISPA emphasized that many of its members provide voice services and have witnessed an increasing trend towards fixed-mobile substitution in the voice market, aligning with global patterns.

Sasha Booth-Beharilal, Chair of ISPA, underscored that the argument for parity between fixed and mobile termination rates stems from the blurring distinction between these call types. Booth-Beharilal emphasized that the average cost of terminating a fixed call has now become comparable, if not higher, than that of terminating a mobile call.

While ISPA disagreed with ICASA’s approach of maintaining separate rates for fixed and mobile calls, it welcomed ICASA’s proposal to address excessive international termination rates, which it believes bear no correlation to regulated rates or actual costs.

ISPA intends to engage with ICASA to ensure a clear understanding of how these proposals will be practically implemented, striving to advocate for fair and efficient telecommunications regulations in South Africa.