We’ll reduce prices – Cell C

Cell C CEO says the telecoms company would without a doubt decrease its retail prices should wholesale call termination charges become cheaper.

May 18, 2007
We’ll reduce prices – Cell C

While the Goliaths of the telecommunications world are against the decrease in wholesale call termination fees, Cell C says bring it on.

Both Vodacom and Cell C made their oral presentation today at the Independent Communications Authority of South Africa (Icasa) hearings to discuss wholesale call termination, which refers to the routing of calls from one network operator to another.

It is part of the interconnection between network operators.

Cell C CEO Jeffrey Hedberg said the telecoms company would without a doubt decrease its retail prices should wholesale call termination charges become cheaper.

“Our strategy is to focus on the lower to middle income segment. Affordability and accessibility is very important. We’ve already reduced the Cell C to Cell C charges because we have that control,” he said.

Hedberg said that Cell C supports Icasa’s proposed asymmetric treatment of operators based on their significant market power (SMP) in the call termination market, coupled with their ability to harm competition.

“We believe that the implementation of a cost based interconnection regime for operators with SMP in the relevant market will lead to lower prices and increased competition,” he said.

He said smaller operators had to be protected at a retail level through ex ante (anticipated changes in the economy) regulation of large operators’ price differentials. This should be done so that regulatory intervention to promote competition in the call termination market does not have unintended or negative impact on the promotion of competition.

Vodacom on the other hand argued similar points to what MTN had argued the day before.

Pakamile Pongwana from Vodacom said that the overall South African mobile market was built on the balance and interrelationship between wholesale and retail charges.

And that by lowering the wholesale price, you could effectively be closing the door on the lower income or no income earners’ access to mobile connection as the revenue from wholesale call termination is used to subsidise them.

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