JOHANNESBURG, South Africa-South Africa’s two leading mobile network operators, MTN and Vodacom, could face a cut in revenues if the third entrant, Cell C, is successful in its bid to have them declared dominant players by the Independent Communications Authority of South Africa (ICASA).
The declaration would see the networks provide essential services, such as interconnection, at cost price. According to the Supplementary Interconnection Guidelines published in December 2002 by ICASA, a dominant player has a market share of 35 percent or more.
In Vodacom’s latest annual report, the company stated it has roughly 60 percent of the market, while MTN’s annual report for 2002 claimed it has 40 percent of the market.
Revenues from interconnect for Vodacom have been recorded as 4.3 billion South African rand (US$542 million), approximately 25 percent of total revenues. MTN does not list any revenues derived from interconnect. However, estimates put it at around 18 percent of 12. 4 billion rand (US$1.6 billion), working out to 2.5 billion rand (US$315 million).
Mandla Msimang, senior manager for policy and development at ICASA, said the operators have until 15 May to respond, and they will have to present strong cases to indicate they are not in dominant market positions. Msimang added the arguments will probably be heard in a public hearing held roughly two weeks after the May deadline.
Yvonne Muthien, MTN corporate affairs executive, said: “We have taken note of ICASA’s request for public comment on Cell C’s submission. We await official confirmation from ICASA regarding the above and will respond in due course in the appropriate ICASA forum.”
Mthobi Tyamzashe, Vodacom corporate affairs executive, said it would be premature for the company to comment on what the implications might be, given the process has to be undertaken first.
