Vodacom: Cellphone fees cut may disrupt SA economy
South Africa’s biggest cellphone operator Vodacom said on Tuesday a dramatic reduction of cellphone charges would be disruptive to the country’s economy and communications sector.
The South African government is holding public hearings on Tuesday and Wednesday as part of plans to push cellphone and telecom operators to reduce interconnection fees, in an attempt to lower telecoms costs that have impacted the country’s growth.
“A dramatic reduction of charges is likely to have a negative impact on government policy objective of universal access and would be disruptive to the economy and communications industry,” Vodacom said in a submission to Parliament on Tuesday.
Cellphone and telecoms operators charge R1,25 per minute in peak times for their interconnection fee, a charge to enable calls to be transmitted from each other’s networks.
Vodacom interconnection revenue, which included income from South Africa’s third largest cellphone operator Cell C for national roaming services, rose by 8,6% to R8,63-billion for the year to end-March.
MTN, South Africa’s second largest mobile operator and Africa’s biggest, raised its interconnect revenue to R6,9-billion in the year to December compared to R6,3-billion in 2007.
Neotel, the South African fixed-line operator set up in 2006 to compete with dominant former monopoly Telkom, said it supported the principle of lowering interconnection prices.
Telkom said the termination rates were determined in the country have resulted in imperfect competitive outcomes in the telecoms industry.
“Telkom is of the view that the regulation of termination rates has received inadequate attention in the Republic of South Africa,” said Andrew Barendse, Telkom’s group executive regulatory affairs. - Reuters.