While the statutory Independent Communications Authority of South Africa (Icasa) is poised to introduce a framework that will yield lower cellphone tariffs, Cell C this month hiked tariffs and MTN and Vodacom likely to follow suit on August 1, it emerged this week.
Cell C spokesperson Jonathan Newman said the Saudi Arabia-held firm hiked charges for its high-spending contract users — estimated at 500Â 000 or 20% of Cell C’s total subscriber base.
Asked to confirm if the leading operator will up tariffs next month, Vodacom’s chief of corporate communications said they will continue to use its channels to make announcements relating to “any changes as and when necessary”.
MTN, whose customers spend the most on average, declined to comment. The listed operator’s market share is around 38% — lagging Vodacom’s 56% or 12,8-million subscribers.
Telkom pays cell operators — including its 50% subsidiary Vodacom — R1,40 per minute to “terminate” calls (to link fixed-line with cellphone and vice versa) while the trio pays the fixed-line monopoly a mere 29 cents, the Link Centre at Wits said in its review report.
The skewed scenario this year forced Telkom to charge more for cell-bound calls compared to what it charges for certain global destinations.
“The declining fixed-line network means that there will continue to be increased substitution of fixed-lines by mobile calls. The asymmetry in interconnection means that consumers will continue to pay higher call costs to mobile operators because the interconnection rate is substantially higher between mobile operators than between Telkom and a mobile operator,” the Link Centre argued.
The Consumers Users Association of South Africa — the same watchdog that called for an Icasa probe into high tariffs — told the telecommunications pricing indaba last week that: “It appears that the mobile phone market is charging excessive amounts for calls and other services.
“This is, we believe confirmed by the fact that the two initial and well established mobile operators are making massive profits.”
Communications deputy minister Roy Padayachie said the growth of the sector was accompanied by job losses, “relatively high retail prices [and] super profits” the operators generated and said it could be argued that it was necessary for the regulator to monitor the interconnection rates. – I-Net Bridge