South Africa's largest telecoms firms may undertake cutbacks if no compromise reached with regulators

October 9
2:48 PM 2013

The two largest wireless operators in South Africa would curb investments and cut down the number of staff if no compromise agreement is reached on lower mobile termination rates as advised by the country's regulatory authority. 

According to MTN Group Ltd's South Africa CEO Zunaid Bulbulia during an interview, "There's a very real chance that if the fees go through the way they are at the moment, we'll have to take a significant knife to costs. We would have to take costs out of the business, right across the board. So staffing, commissions we pay, handset subsidies."

The cost of paying the competitor to end calls on their network would be cut in half, to just ZAR0.20 or USD0.02 as of March 2014. This amount wad confirmed by the Independent Communications Authority of South Africa in a statement released last October 4. There are a number of draft proposals to include changes to so-called asymmetry, helping smaller competitors through lower charges to use the Vodacom Group Ltd and MTN networks.

For its part, Vodacom CEO Shameel Joosub said, "There'll be less revenue for us to reinvest into the business, as we're subsidizing our rivals."

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