Vodacom and MTN ensured Cell C could not compete against it when it launched. The same battle, albeit with much lower stakes, is unfolding again.
Vodacom and MTN ensured Cell C could not compete against them when it launched in 2001 by drastically increasing mobile termination rates.
Between 1994 and 1999, Vodacom and MTN charged each other 10c per minute for off-peak calls and 20c per minute for on-peak calls to terminate calls on their networks. After Cell C launched, it had very few subscribers, so most of its subscribers called Vodacom and MTN numbers.Vodacom and MTN, with millions of subscribers, terminated many calls on their own networks without incurring termination rates.
The Independent Communications Authority of South Africa finally stepped in to regulate call termination rates in 2010. The chart below shows the rapid increase in mobile termination rates between the plan to license two new mobile operators and Cell C’s launch.Cell C is once again fighting for call termination rate fairness after IcasaIcasa has proposed substantial reductions in call termination rates and the abolition of asymmetric rates for smaller players like Telkom and Cell C.
It warned that the proposed reduction in interconnect fees, particularly the removal of asymmetry, raises concerns about market dynamics and consumer welfare.
Cell C Headline Independent Communications Authority Of South Afri MTN Vodacom Cellular
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