'Cell fees must boost variety'

Johannesburg - Telecommunications group Neotel on Wednesday came out in support of Cell C's call for interconnect rates to vary from network to network.

Cellular services provider Cell C told parliament's portfolio committee on telecommunications last week it believed interconnect rates should not be the same for all telecommunications providers. It suggested a rate of 75c per minute for itself and 65c for other cellular networks.

Neotel CEO Ajay Pandey said he agreed with Cell C's suggestion, saying asymmetrical interconnect rates will support competition in the telecoms sector. To this purpose, the tariff structure should benefit new entrants to the market.

"A new entrant is typically someone who has recently entered the market and is an operator who is actively investing in growing its network to compete against incumbents," Pandey said.

"Asymmetrical interventions should typically be designed for new entrants, rather than targeted at market share."

However, Pandey said while he supported a reduction in interconnect rates, the industry and regulators must not lose sight of other issues facing the sector.

He said these include carrier pre-selection (where callers choose which network to route their calls on), number portability, numbering assignment and environmental regulation issues providers face while building a network.

"At the centre of any intervention must be an initiative to ensure the support and viability of the regulator so that other key challenges facing new entrants can be swiftly addressed," Pandey said.

"There are a number of issues that will remain long after interconnect prices are dropped, unless they are addressed directly," he said.

Pandey added it is essential for a fall in interconnect rates to reach the consumer. He said Neotel undertook to pass the benefit on to subscribers, should interconnect rates be reduced.

- Fin24.com