DON'T get me wrong - the 30% slash in interconnect rates levied by cellular networks for carrying each other's calls is a good thing. It had to happen.
But after years of fleecing from South Africa's cellular duopoly, I can't help feeling that Minister of Communications Siphiwe Nyanda was taking things a bit far when he said the slash was a "Christmas present" for South Africans. That depends on the size of present you are accustomed to.
An old friend of mine recently returned from the UK where she has signed a cellphone contract for £40 a month (about R560) that gets her unlimited on-network calls and unlimited data usage over 3G.
In South Africa I pay about the same for a couple of hundred minutes and 250 megabytes of data - considerably less than infinite. Oh, and I get a "free" phone.
So what's the difference?
When we talk about South African telecommunications, we are told that we must take our geographic remoteness and countless other factors, developing world and otherwise, into account. But I'd tender that this is not the case for cellular. Our cellular networks are every bit as old and mature as their international counterparts.
There is no international connectivity to consider when it comes to domestic call rates and very little to convince us of the rates that have been charged until now.
The difference between our local networks and their friends in Europe is that our guys have to deal with a complex mess of regulation and incumbency from older backhaul networks concerning data, and they have to contend with lower average revenue per user (ARPU) rates than their European friends. So let's grant them those factors and accept that prices should be a little higher in South Africa.
However, market nuances aside, it is a fact that outright collusion took place in the early days of cellular in South Africa as the two initial networks agreed on the degree of fleecing they would impose on the SA public.
The collusion has been informal since then, we hope, but made itself evident once more when Cell C's licence was announced. At that time our conniving cellular duopoly decided to hike interconnect rates to keep the new guy out - and it worked.
For years we have been the victim of this questionable duo that have taken us for every cent we're worth, so you'll forgive me for not being entirely grateful for the few pennies I will now be saved thanks to government intervention. It's a step in the right direction, but far from where we should be.
Make it sweet and simple
If our existing cellular networks want to retain decent margins and remain relevant in a rapidly evolving market, they will have to simplify matters. I for one am tired of 10-minute calculations before making a call to determine what it will cost me. At month's end, I cringe in anticipation of my cellular bill which will inevitably contain some nasty surprises.
Instead, I would like to pay a flat rate. It doesn't have to be a very low one initially - I wouldn't want to deprive the children of our cellular providers' executives of the pricey Christmas presents they are accustomed to - but at least make it simple. One rate, unlimited calls. And make the same true for data when it is possible to do so.
Telkom is making its big play into mobile and enjoys government shareholding - especially useful when Mr Nyanda must make decisions (for the good of the consumer, you understand). Cell C has already announced reduced rates and now all eyes are on the MTN-Vodacom duo. Will they make this a Christmas full of cheer for South African cellphone users, or will they protect their own stockings, as usual?
While European networks have openly committed to halving call rates in their countries, our duo seems bent on making as much as possible for as long as possible. Let's hope Mamodupi Mohlala, our new director general of communications, meant what she said when she warned them that lower profits were expected.
- Fin24.com