According to a Business Day report, the proposed 29% reduction in mobile interconnection rates could proceed as planned in March, Vodacom CEO Pieter Uys said. The reduction requires that the Independent Communications Authority of South Africa (Icasa) approves an amended proposal from operators.

Icasa rejected the initial proposal from Vodacom, MTN and Cell C that would have cut peak interconnection rates from USD 0.16 to USD 0.12 per minute starting March 1. Icasa objected to the proposed three-year phased introduction of the rate reduction, which would have forbidden Icasa from reviewing mobile interconnection rates until March 1, 2013.

Uys said that Vodacom would consult with the other operators to develop a new proposal that would not include a phased introduction. The new operator agreement would maintain the commitment to a new USD 0.12 peak rate, effective March 1.

"We have to sign agreements between each of the operators, and once all of those are signed, we will submit the proposal to Icasa. March 1 is not far away, so we have to do it as quickly as possible - I would hope in the next five business days."

Icasa will release draft regulations on interconnection fees next month, with final regulations to come in June. A spokesperson said the new rates would be cost-based. Icasa has estimated that the cost of interconnecting networks at USD 0.05 per minute.

"The best we can hope for is a two-year glide path - for now they will want to keep their options open. An overnight change to a business model is always difficult, but we've already started working on it because we know it will come," Uys said.

MTN's Graham de Vries said that MTN had decided on a voluntary reduction after mounting pressure from various stakeholders.

Icasa representative Jubie Matlou said the regulator might agree to the new proposal. "The only problem we had was with the precondition... that meant we couldn't tamper with the rate for three years."