Cell C demands 40% cost reduction

[ponder]

http://www.iol.co.za/index.php?set_id=1&click_id=594&art_id=vn20091025073826755C475987

But Nyanda said the latest developments do not offer the consumer any savings and that the cellphone companies seemed to be operating in bad faith.

"I started the process to lower interconnection fees, but they are attempting to negotiate with the Independent Communications Authority of SA (Icasa). They are playing politics, yet it is I who has to secure political buy-in for whatever is agreed," he said.

"The industry agreed that the prices were high, and I thought they would come to the table. Clearly they are avoiding to do that and are acting in bad faith by not consulting with the ministry. I expected them to engage with proper proposals aimed at reducing the interconnection costs."

Nyanda said it appeared that profit remained the key motive for their actions. "The ministry's door is open, but it is about to be shut ... if they want to make honest proposals, they should do so, otherwise we would have to go the regulatory route," he warned.

Cell C chief executive officer Lars P Reichelt said the proposals from its competitors offered no significant changes and it was for that reason that his company was in disagreement.

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[mikef]

Cell C chief executive officer Lars P Reichelt said the proposals from its competitors offered no significant changes and it was for that reason that his company was in disagreement.

"Cell C maintains its position on a once-off reduction of 40 percent in the peak interconnection rate and a flat-rate of 75c," he said.

If Cell C stopped with this statement I would possibly have some sympathy for the viewpoint. I would however like to see them illustrate how a drop of the MTR of 40% would benefit the consumer any more than a drop of 19%.

However when they add the following I have major doubts about their sincerity:

Reichelt said mobile termination rate asymmetry was the best way to ensure a level playing field and to increase competition.

Cell C was therefore proposing that Vodacom and MTN pay the smaller operators a mobile termination rate of 75c per minute while the smaller operators, including Cell C, pay Vodacom and MTN a rate of 65c.

 

[tco21]

I can't believe VC + MTN managed to get it down to 19%

 

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I can't believe Nyanda is so naive...