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ICASA Cost Modelling Exercise Puts Cheaper Overseas Calls in Sight

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The Internet Service Providers’ Association of SA (ISPA) welcomes moves by the Independent Communications Authority of SA (ICASA) to conduct a cost modelling exercise with regards to voice call termination rates and to introduce curbs on charges from local voice providers for terminating calls from outside of South Africa.

The result is likely to be cheaper overseas calls and much-reduced phone fraud, says the Association representing over 200 Internet Service Providers (ISPs) members, many of which provide voice services.

Call termination rates are the fees telecoms networks across the world levy on each other to ensure calls originally placed on another network can reach – or terminate – on their network.

For example: Subscriber A – a Vodacom customer – calls Subscriber B – an MTN customer. The call originates on Vodacom’s network before being transferred to MTN’s network and then being carried on the MTN network to reach Subscriber B. MTN invoices Vodacom for the use of MTN’s network to complete the call: this is the call termination charge. Vodacom then invoices Subscriber A to recover its fees as well as the call termination charge which it has to pay to MTN.

Under ICASA regulation call termination charges for local calls have been substantially reduced since 2014, but there is still work to be done.

In addition, call termination rates for international calls (i.e. where Subscriber A it outside South Africa) are currently unregulated, leading to a massive differential between what can be charged for terminating calls locally and what can be charged for a call received from outside of the country. A gap like this soon gives rise to fraudulent activities where people attempt to present international calls as local calls.

OperatorTermination rate for local callsTermination rate for international calls% difference
Telkom (fixed)R0.06R1.642 633%
VodacomR0.09R2.602 788%
MTNR0.09R2.492 666%

For ISPA members, this has caused major challenges in terms of billing disputes and quality of service issues, amongst others.

Consumers, for their part, are receiving international calls with incorrect caller ID numbers that are frequently mistaken for spam and unknowingly paying more to call overseas than they should. For example, calls to mobile numbers in Europe are typically between R 2.00 and R 22.00 per minute, however, once reciprocity provisions come into place, these could drop to as low as R 0.20 per minute.

ICASA clearly has had enough and recently published the findings of its review of SA’s Call Termination Regulations of 2014. The summary is that ICASA has resolved to do a detailed investigation into rates for terminating local calls  and that it will require licensees to use the principle of reciprocity to negotiate down international termination rates.

According to ICASA Councillor Dr Charley Lewis: “The international termination rates charged by local licensees may not be less than the domestic regulated termination rate or higher than the international termination rate offered by their counterpart – meaning that the difference between domestic termination rates and international termination rates must be fair and reasonable.”

The next step is for ICASA to publish a notice of intention to initiate the next phase of the review. This includes a public consultation process to determine the real cost of call termination services and to amend the existing regulatory framework.

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