Cell costs questioned

Johannesburg - Early next month telecommunications players are expected for the first time to provide feedback to the Independent Communications Authority of SA (Icasa) on interconnection tariffs.

The regulator last week announced an industry process in which Vodacom, MTN, Cell C, Telkom, Neotel and Ispa, the Internet Service Providers Association, will negotiate on reducing interconnection tariffs.

Icasa will oversee the process.

Interconnection tariffs are the amounts that operators pay each other to carry calls back and forth across the different networks on each other's behalf. For cellphone calls the tariff is currently around R1.25 a minute.

Some observers reckon the tariffs are excessively pushing up call costs for consumers and crippling competition in the industry.

On Friday the regulator issued a press statement to say it expects to have feedback on the process by October 9.

The negotiations will focus specifically on the costs of cellphone calls, Icasa announced in its statement.

Some industry experts reckon lower interconnection rates will not necessarily make a difference to call costs for consumers in the short term because operators will simply restructure their packages to make up the lost income.

But others believe operators should take care, because the competition authorities will keep a close eye on the process.

General Siphiwe Nyanda, the Minister of Communication, declared in an interview in the latest Financial Mail that a decline in telecommunication costs and increased access to telecommunication services were his priorities.

According to the article, Nyanda declined to elaborate on interconnection tariffs, but did say that a lower costs were "guaranteed".

- Sake24.com

For more business news in Afrikaans, go to Sake24.com.