Register now for Fin24 Dashboard and get access to portfolios, watchlists, financial comparison tools, and a whole lot more to help you achieve your financial goals.

Data provided by McGregor BFA
All data is delayed
Loading...
Where am I? Home
 
Prices are delayed by 15min.
Join the Fin24.com conversation about JSE-listed stock by using every time you tweet.

No more telecoms 'rip-offs'

Oct 18 2009 15:34 Andile Ntingi

Related Articles

SA cell rates 'cheap'

Icasa's expertise questioned

Minister orders call rate cut

Cell cost cuts 'ill-considered'

Cell cost cuts coming soon

Telecoms revenue safe

 

Top Stories

Financial mess 'unintended', says Nedbank

Feb 12 2012 15:59

Moral hazard, financial weapons of mass destruction, a huge mess - these were the words used by a founder member to sum up the collapse of the Pinnacle Point Group.

Construction looks to more graft

Feb 12 2012 15:58

Construction companies are now undertaking a second round of self-examination into uncompetitive behaviour.

Merkel 'taking Europe in wrong direction'

Feb 12 2012 14:54

American billionaire George Soros has slammed German Chancellor Angela Merkel, warning that her policies could lead to a repeat of the Great Depression.

 
Share Share line Print

Johannesburg - Once government is done with slashing cellphone interconnection rates, it will issue directives to cut the costs of broadband, international calls and short message service (SMS), which are all high by global standards.

Mamodupi Mohlala, the director-general of the communications department, said this week that the government had set itself a deadline of forcing down telecoms costs by the end of May next year.

"We have a programme of action that has specific timelines. We expect by May next year to have given a policy directive on all the services. This will include mobile interconnection, broadband, international calls, SMSes, and retail tariffs," Mohlahla said.

Mohlahla's department commissioned research group BMI Tech-Knowledge (BMIT) to analyse telecoms prices and their usage in five developing countries such as South Africa, Malaysia, Chile, Brazil and India.

What the study has found is that South Africa has relatively high mobile penetration, yet usage is very low due to expensive tariffs.

Government has already set the ball rolling on pushing for cellphone companies to reduce their interconnection fees, the charge they impose for transferring calls to other networks.

The mobile network operators charge interconnection rates at R1.25 a minute during peak hours.

The study found that the interconnection rate in South Africa is nearly as high as that of Brazil, which has the highest interconnection fee of the countries analysed.

In US dollar terms, Brazil's interconnection rate is 28.49c a minute compared with South Africa's fee of 27.06c. India has the lowest interconnection charge at 1.97c, followed by Malaysia's 4.56c.

South Africa and Brazil were also found to have the highest SMS costs. On average, South African cellphone users transmit about 28 SMSes a person per month and spend US 18c on them, while Brazilian subscribers send 37 SMSes for US 25c.

While South Africa has the cheapest international calls from a fixed line, the mobile international calls are a different story altogether. To make a call to the US from a mobile phone, South Africans pay US 64c a minute, while the Indians fork out 41c and the Brazilians 43c.

South Africa was found to have high broadband tariffs, but of all the countries surveyed its broadband has the slowest speeds. Internet broadband penetration is also low in South Africa.

This week, cellphone companies MTN, Vodacom, and Cell C, the country's smallest operator, appeared before Parliament's committee on communications, which has called for the reduction in interconnection rate to 60c (South African) before the end of the year.

The committee further wants the interconnection rate to be slashed by 15c a year over the next three years to a final rate of 15 cents.

Mohlahla said the government would see to it that this happened.

Now the ball is firmly in the regulator's court. The Independent Communications Authority of SA (Icasa) has been instructed by Communications Minister Siphiwe Nyanda to determine an interconnection fee that is not 50% higher than cost by the end of next month.

Arthur Goldstuck, who heads research firm World Wide Worx, said Icasa need to force cellphone companies to reduce or scrap mandatory charges, such as itemised billing, imposed on contract clients.

"The cellphone companies need to be transparent as how the cost of the call is broken up," Goldstuck said.

- City Press

 
 
Comment on this story
0 comments
Comments have been closed for this article.
Facebook still a closed book in China
Feb 08 2012 16:59

Mark Zuckerberg wants to ''friend'' China's massive market but how far is he prepared to go, and against what competition?

Attie

Whilst doing my regular book browsing at Exclusive Books just before Christmas 2011 a book with the simple title “My Book” caught my eye. Paging through the book I saw nothing else but wild life photographs with accompanying quotations by either the author or another well-known person. ... Read their blog...

Recently updated
Podcasts
The Sishen saga

Legal expert Peter Leon on the increasingly complex legal wrangle over the Sishen Iron Ore mine. Time: 8:17 Listen Here...

Before you list

Is the clarion call of the JSE calling? Listen to Fin24’s expert panel discussion before you list your small business. Time: 17:29

Compare and Buy

Compare and apply for hundreds of financial products from many suppliers.

Credit cards Medical aid Current accounts Think Money

Money Clinic

Money Clinic Do you have a question about your finances? We'll get an expert opinion.
Click here...

Loading...