South African mobile operators share values and rates cut by regulator edict
Vodacom Group, the South African mobile operator, together with the MTN Group saw their shares fall sharply last Monday after the country's telecom regulator announced plans to cut fees by 75% for competitor use of networks.
On the other hand, after many years of being charged higher rates to connect the dominant mobile firms, Telkom, the South African fixed line operator saw their share values jump to its highest in nearly two years.
The push to lower call rates to the African average rates is moved by the government elections by 2014. The Independent Communications Authority of South Africa had announced after market close plans to cut so-called mobile terminaton rates to ZAR0.10 from ZAR0.40 by 2016. The fixed line termination rate though would be retained.
According to Vodacom CEO, the plan, which also would cut rates by 50% by 2014, would be 'too steep' and would have 'serious negative imapact' on its business. Vodacom is the South African unit of Vodafone Plc.