The Independent Communications Authority of South Africa (Icasa) said on Thursday that the process to reduce the rates of mobile calls was estimated be finalised by June 2010.

This flies in the face of calls from Communications Minister General Siphiwe Nyanda and MPs for mobile and fixed line telephone operators to drop their interconnection rates from the beginning of November to 60 cents a minute during peak times.

The communications committee said that interconnection rates in South Africa set at R1.25 per minute during peak times are exorbitant and excessive, resulting in extremely high telecommunication prices.

Operators currently charge a fee of R1.25 a minute at peak times for linking a call from one network to another.

Icasa said it had already begun the second phase process of assessing competitiveness in the call termination market "and will develop regulations to impose pro-competitive remedies in the individual markets with significant market power and which are characterised by lack of competition."

"There are several retail and wholesale markets in the electronic communications industry that need to be studied and reviewed with the aim of determining their level of competitiveness. A market that has, in recent months, attracted a much closer public and media attention is the Call Termination Market (Interconnection Rates)," Icasa said.

As long ago as 2007, the authority issued a 'Findings Document', following a public consultation process, regarding the regulation of interconnection rates) which was identified as one of the priority markets to be subjected to pro-competitive regulation.

"However, the Findings Document did not assess the competitiveness of these markets," Icasa said.

The assessment of competitiveness and the imposition of pro-competitive regulatory framework would then constitute the second phase of the process, the authority continued.

It said that it had already begun the second phase process of assessing competitiveness in the call termination market, and developing regulations to impose pro-competitive remedies.

"It is estimated that the process will be finalised by June 2010," Icasa said.

MTN SA recently moved to reiterate that it was in ongoing discussions with other operators regarding interconnection rates.

The mobile operator on Friday confirmed that an agreement had been reached with Vodacom, and the group was pursuing bilateral negotiations with Cell C and other operators.

"The two parties reached an agreement based on the parameters set in earlier negotiations, which have been under way for some time. However, it is with regret that no agreement has been reached with Cell C at this stage," it said.

Cell C chief executive Lars Reichelt said: "Cell C maintains its position on a once-off reduction of 40 percent in the peak interconnection rate and a flat rate of 75 cents, as this is common practice in 22 of 28 countries in the European Union. This international best practice leads to more competitive pricing and it is only through competition that retail rates will go down.

"In addition, and as supported by the study conducted by the European Union in 2007, mobile termination rate asymmetry is the best way to ensure a levelled playing field and again to increase competition. Cell C is therefore proposing that Vodacom and MTN pay the smaller operators a mobile termination rate of 75 cents per minute whilst the smaller operators, including Cell C, pay Vodacom and MTN a rate of 65 cents," he said.