Telkom, DOC rejoice as MTN, Vodacom cry foul over call rates
Jan 30,2014 0 Comments
Commenting on the announced rates for call termination communication minister Yunus Carrim said they welcome ICASA’s decisions and believe they serve the country’s interests. “We would like to see these new rates contribute to consumers and business paying less to communicate and benefitting economic growth and job creation over time.
Call Termination Rates refer to the fee that one network charges another for receiving and terminating calls on its network.
The minister said high costs to communicate have deterred global and domestic investment in this country. “These rates provide for greater competition which we expect to lead to reductions in the cost to communicate.” He said.
Responding to the announcement Dr Miriam Altman, Head of Strategy at Telkom said she was encouraged by the introduction of the new Call Termination Rates. “This brings the market closer to parity in termination rates, supporting the move to convergence between fixed and mobile services. Telkom has for many years subsidised the dominant mobile operators, and this move will begin to level the playing field. She said.
Commenting on the announced termination cuts Vodacom CEO Shameel Joosub said other operators will gain from Vodacom’s infrastructure that it had invested in the past. “I wish I could say this is a victory for the consumer, but it is far from it. This is a subsidy which in effect means that Vodacom will be charged more to call Cell C and Telkom Mobile than the latter will be charged to call Vodacom. This prejudices Vodacom’s customers, and rewards those who have not invested in their networks at the expense of those who have.” He said
Seen by smaller operators as levelling of the playing field Telkom says the benefits of reduced termination fees will be beneficial to the consumers. “Telkom will pass on reductions to consumers and will communicate these savings once it has fully assessed the impact of the regulations,” said Altman.
Following notification from ICASA, the incumbent mobile cellular operators are expected to reduce their Mobile Termination Rate (MTR) from 40c today to 20c as of 1 March 2014. The MTR’s for small mobile operators like Cell C and Telkom Mobile will remain at 44c.
“We understand that ICASA consulted extensively with all the parties and we feel that they should accept the outcomes. What some of them may lose in immediate profits will be exceeded by what they will gain in the medium and long term” the minister added.