The reduction in the interconnection rates will see the current cost of connecting between networks drop from 1.25 rand to 0.89 rand (or US$0.01) a minute, with gradual, further decline over three years to 0.61 rand a minute.

Vodacom, MTN and Cell C agreed to reduce the interconnection rates to 29 percent by March 1 this year in order to allow customers call across networks cheaply. The draft agreement on the reduction of interconnection rates was submitted to Icasa last month.

However, Icasa initially rejected the agreement, claiming it was not the role of the providers to guide Icasa on interconnection rates. Icasa added that the plan would tie Icasa to an agreement for a three year "glide path" for rates during which time it would be prevented from taking further action on the rates.