SENS Note - 26 October 2009

MTN update on interconnection discussions

MTN is in ongoing discussions regarding interconnection rates and in this regard the following press release was issued by MTN SA on Friday, late afternoon: "MTN SA can confirm that an agreement has been reached with Vodacom, and is 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 underway for some time. However, it is with regret that no agreement has been reached with Cell C at this stage. These bilateral negotiations take place in terms of the regulations by the Independent Communications Authority of South Africa (ICASA), which has oversight over the process. In terms of the agreement, the parties proposed approximately 19% immediate reduction of the blended wholesale interconnect tariffs, with further reductions year-on-year for the following three years. This reduction cycle will enable MTN SA to make the necessary changes to its operations and long-term commitments to reflect the decrease in interconnect rates. In terms of due process, the two parties will now need to lodge the agreement with ICASA for their regulatory oversight. MTN SA is pleased that progress has been made in the negotiations, and will continue to engage in good faith with other parties as part of the ICASA process to resolve outstanding interconnect agreements. MTN SA believes that the agreement reached with Vodacom will have the effect of lowering mobile termination rates without impacting too heavily on jobs, investment, access and penetration."

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