OWN CORRESPONDENT, Pretoria | Thursday
NATIONAL telecommunications utility Telkom has lashed cellular operators MTN and Vodacom for what it calls “price discrimination”, saying this could have a significant impact on Telkom’s proposed rate increases next year.
Chief operating officer Tom Barry said Telkom’s rates for services on which it had a monopoly were expected to rise by 5,4% on average next year, but this could be less if the company succeeded in renegotiating its seven-year-old interconnect agreement with MTN and Vodacom.
Telkom said the 1993 agreement with the operators effectively fixed Telkom’s share of revenue from calls from its network to mobile users, and calls made from mobile users to Telkom customers – regardless of the volume of calls or the retail price of the call.
“Adjusted for inflation, the revenue we are getting is a small fraction of the 1993 prices. The prices for facilities were also fixed in 1993, meaning that the mobile operators are paying less for these facilities than other customers.”
Furthermore, these two operators charged Telkom between 70 and 100% more to interconnect with their network than they charged their direct connect customers.
Telkom was seeking formal negotiations with Vodacom and MTN in an effort to address the issue, he said. In addition to this, Telkom filed a price discrimination complaint against the cellular operators with the Independent Communications Authority of South Africa in August, which was now “ripe for hearing”.
This would have a material impact on some of Telkom’s proposed increases, would also have an impact on special circuits ordered by business customers, he said.
Michael Stocks, general manager of regulatory affairs at MTN, said his company had been trying for years to get Telkom to renegotiate, without success.
Regarding Telkom’s argument that the fixed prices the cellular operators paid for facilities were lower than what others paid, Stocks said everybody in South Africa was obliged to go to Telkom for such facilities.
Technological advancements since 1993 should actually have allowed Telkom to lower its prices.