Gauteng Business News

Send  Share  RSS  Twitter  18 Nov 2009

IT & TELECOMS: Mobile Rate Cuts Only the First Step


Recent Gauteng Business News

The announcement by the Minister of Communications that the interconnect fee that is added to the cost of calls between mobile networks will be cut has been welcomed in all sectors of South Africa, but consumers should demand that they must be able to see how their call costs are affected.

An independent technology market research organisation, World Wide Worx, was the first to bring public attention to the high cost of interconnect rates - formally known as the mobile termination rate - through its annual Mobility research project four years ago.

It is a first step towards more affordable communications. There is, however, still a long way to go, and there are many obstacles to be overcome, but Minister of Communications Siphiwe Nyanda has demonstrated the kind of political will that is needed to address these obstacles.

The willingness of the mobile networks to make a meaningful cut in the interconnect rate is also encouraging, and everyone is hopeful that this heralds the beginning of a new approach to the concerns of the consumer.

Unfortunately, the rate cut will have little impact if the networks are not required to be transparent regarding the cost structure to the consumer.

Under the current structures of call packages, it is almost impossible for the consumer to understand the cost components of various categories of calls, and this is clearly an area of potential confusion and disinformation.

Across both mobile and fixed line networks, consumers need to be able to see, for each category of call, such as off-peak and peak-time, to mobile and landline numbers, what amount is made up by the interconnect fee.

World Wide Worx has pointed out that the interconnect fee could potentially still come down to as low as 30c.

World Wide Worx has issued a priority list of further areas that need attention regarding the cost of communications in South Africa:

* Clear evidence of the real cost of terminating calls from one network onto another. Extravagant claims have been made, but no network has been willing to play open cards on the issue. It has been argued that the real cost may be a few cents, and it is important for both transparency and affordability to clear up the confusion.

* Transparency of the makeup of call costs to the consumer. This is essential for cuts in specific areas to be visible.

* Investigation of the requirement by all mobile networks for compulsory caller line identity and itemised billing on all contract accounts, both of which incur a cost to the customer. These do not apply to pre-paid accounts.

* High line rentals for fixed line users, and a requirement by the incumbent fixed line provider for its customers to pay a high deposit fee, which is then held indefinitely or until the account is terminated.

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