Lower termination fees may spark telecoms turnaround

Article by Alison Gillwald published in BusinessDay.

Much has been made of Vodacom ’s R800m loss of revenue in the six months to September, owing to the reduction in termination rates from R1,25 to 89c in March, reported in its interim results last week.

As if to confirm the dire warnings by MTN and Vodacom following the decision by the Independent Communications Authority of SA (Icasa) late last month to cut further the rates of dominant operators, this loss of revenue has been used to flag the threat of a future loss of earnings that would have been received from terminating the calls of their competitors on their networks.

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