All Dressed Up but Still No Way to Phone: ICASA Must Complete Carrier Pre-Selection Framework

30 July 2012

The Internet Service Providers` Association (ISPA) has strongly criticized the Independent Communications Authority of South Africa (ICASA) for its half-hearted and incomplete effort to meet its legislated obligation to introduce carrier pre-selection (CPS) in South Africa.

While a Code of Conduct governing the provision of CPS services was finalised on 28 April 2012, the Code and CPS regulations previously published by ICASA will not have their intended effect of promoting subscriber choice and reducing call costs unless ICASA intervenes in the matter of call origination rates.

Carrier pre-selection allows consumers who are subscribers of one telecommunications service provider to take advantage of special rates offered by another. For example, a consumer using Provider A would be able to take advantage of Provider B’s special offer on calls to, say, Nigeria by dialing the carrier pre-selection (CPS) code provided by Provider B before dialing the number in Nigeria.

“The Electronic Communications Act requires ICASA to introduce carrier pre-selection to benefit consumers, and this Code of Conduct should be a last step in doing so,” says Jaap Scholten ISPA Co-Chairperson. “However, the CPS intervention is ineffective because of ICASA’s omission to make the necessary intervention in the market for call origination, leaving the door open for the incumbent mobile and fixed line operators to squeeze out new players.”

The issue is that service providers charge other providers using their networks either call origination or termination fees, depending on which portion of the network they use. ICASA has already intervened in setting rates for call termination but it has not yet done so for call origination. This means that the provider offering CPS can set a rate for call origination that is too high to make it financiallyfeasible for other providers to make CPS special offers available to their clients.

ISPA has noted that almost all of the incumbent service providers are adopting the strategy of charging high call origination rates to shut out competitors.

In order to resolve this issue and promote much-needed competition in the telecommunications services sector, ISPA is urging ICASA to intervene in the market for call origination. “What’s worrying is that ICASA’s strategic plan for the next three years indicates that it has no intention of taking this and other steps necessary to make carrier pre-selection a reality,” says Scholten.

“ISPA calls on ICASA to honour its obligations under the Act and move forward with carrier pre-selection. We are all agreed that telecommunications costs are too high and need to come down to stimulate economic activity. ICASA holds the key to achieving this and supporting the drive to create jobs, something that the government in general and the Department of Communications in particular have put their weight behind,” concludes Scholten.