Dispute Resolution

Vodacom mobile termination rates challenge

CDH's Dispute Resolution practice is an on-going adviser to Vodacom, the African mobile telephone company which has its roots in South Africa and services 40 plus countries across Africa.

In a review application of national importance that garnered a high level of media coverage, Partners, Pieter Conradie and Anja Hofmeyr advised cellular giant, Vodacom in contesting Independent Communications Authority of SA's (ICASA's) promulgation of call termination regulations (First Regulations) that included mobile termination rates (MTRs) - charges which one telecommunications operator charges another for terminating calls on its network - which were set to come into operation on 1 April 2016.

The First Regulations strongly favoured smaller cellular players to the detriment of the larger players. Vodacom and MTN were certain that ICASA did not conduct a proper review of the relevant markets and they brought the matter before the High Court. CDH's Dispute Resolution practice demonstrated, first, that ICASA's initial asymmetrical termination rates in the First Regulations were unjustified and illogical. If the MTRs set in terms of the First Regulations had survived the High Court's scrutiny and were found to be valid, it would have had a profound financial impact on Vodacom. Our team's major success was in attaining a final order from the High Court declaring the First Regulations unjustified and illogical, rather than the anticipated interim order. This final order alone saved our client millions. The final order led to the promulgation of the Second Regulations, which contained rates which were decidedly more favourable to our client.

ICASA subsequently published new Call Termination Regulations (Second Regulations), which Cell C took on review. Once again, our Dispute Resolution experts were called on to show, in response to Cell C's later review application, that the Second Regulations were rational, justified and within the bounds of ICASA's authority. Our client had another victory in Cell C's decision to withdraw its application challenging the Second Regulations. Had Cell C not withdrawn and the matter proceeded, Vodacom may have been exposed to higher MTRs (rates) in the event that court found the Second Regulations to be invalid.