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South Africa’s telecoms regulator continues trying to balance the need for a viable, thriving mobile sector with that for lower communication costs for consumers. Independent Communications Authority of South Africa (Icasa) faces pressure from both sides of the market. Telecom providers, in search of returns, want a market that justifies the billions of rand spent on network infrastructure, new products and customer acquisition. For consumers, the cost to communicate has been a thorny issue for more than a decade especially as the need to stay connected has increased. Termination and interconnect In recent months, South Africa’s mobile providers have reported declines in interconnect fees, the cost to terminate calls on different networks. This had been expected after a December 2024 move by Icasa to gazette new call termination regulations that aim to cut voice communication costs. Operators had previously made much from this line of business, but the new regulations reduce the costs of making calls to subscribers on other operators’ networks.Now the actual costs have begun to be counted. Cell C reported that its “other” revenue streams, including roaming, incoming revenue, digital services, fibre and enterprise, declined during the year ended May, “primarily due to the regulated reduction in mobile termination rates (MTRs)”.In the 12-month period, other revenues were R1.75bn, an 11% decrease year on year. The now JSE-listed group said the R174m decrease was due to “the regulated reduction in termination rates”.Previously, the large mobile operators charged 9c per minute to terminate a call on another operator’s network. Icasa reduced this to 7c in July 2025, cutting this further to 5c in July 2026 and then to 4c in July 2027.Small players previously charged 13c per minute, which went down to 9c in July 2025, recently falling to 5c in July 2026 and 4c in July 2027.As a “small player”, Cell C said the further reduction “is expected to place continued pressure on incoming revenue in FY27”.The other small player, state-affiliated Telkom, has seen its interconnection fees come down across mobile and fixed services. Mobile has seen the biggest effect with this income stream coming down each quarter since June 2025 at R157m to R107m by June 2026, a 29% drop.Large players are also feeling the effect. MTN noted that interim growth in its wholesale business was partially offset by “lower Telkom national roaming revenue, reflecting reduced traffic volumes, together with a decline in interconnect revenue”.South Africa’s second-largest mobile operator did not say how much had specifically been lost due to the new measures. Interestingly, Vodacom’s interconnect revenue for the financial year ended March went up by R17m on the previous year, at R1.809bn. Yet, the company saw a 16.4% year-on-year drop in interconnect for the first quarter of its year. Mobile providers will continue to feel the effect of the new rules until Icasa’s rollout is complete, by which time a “new normal” or base can be established. Data rolloverFurther pressure on income is expected as Icasa works to implement rules that cut expirations on mobile data. From January 2027, mobile providers will have to allow consumers to roll over unused mobile data without it expiring. Daily, weekly and promotional bundles are exempt from the new regime. “The implementation of the data rollover … is expected to temper revenue growth during the second half of the year,” Cell C said. Vodacom and MTN have taken the regulator to court in opposition to Icasa’s latest plan. Business Day
