How to reduce telecoms costs

[cookiemonster]

I think the main point here is that, because Vodacom has the majority of subscribers on their network in ratio they spend far less in interconnect fees. Over 90% of my contacts are on Vodacom and if not I call their landline first. The smaller operators calls are mainly outbound, so they are really getting screwed whilst making the larger networks richer.

 

[dominic]

bravo

 

[DXL]

Revenue in Tanzania and the DRC was hit by weak economic conditions, strong competition and higher excise duties, Uys said. Stripping out the taxes, revenue would still have declined, but only by 4.2%.

Churn increased in the Tanzanian and DRC operations off the back of competitors offering low tariff deals. In Tanzania, average revenue per user (ARPU) was 3.8% lower in the local currency when compared with the previous quarter.


Part of Vodacoms financials

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However, there is nothing to stop cell operators reducing their interconnect fees, but keeping their retail charges unchanged. But without the high interconnect rates, they are much more vulnerable to competition.

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The problems we are having in SA.

You be the judge who's mucking up the SA Telecom's Landscape !

Hint : The answer is ?


DXL - TEAM

 

[DragonLogos]

This issue has been brought up to ICASA a few times and yet they boldly do nothing

 

[rubble]

"This is not correct. The interconnection charges are a small bit of their turnover."

How is that possible ?
If interconnect fees are R1.25 a minute and they reduced to 60c per minute that is half the revenue stream gone.
Correct me if I am wrong

Because between the two largest mobile players the traffic between them is more or less equal so the interconnect charge cancels itself out, they increased it to the current rate from 20c many years ago to try and stop CellC and others entering the market and the traffic flow would be unequal and they would have to pay more out to Vodacom and MTN than they would receive.

And MTN and Vodacom know that if the interconnect rate is reduced more than 50% then Cell C suffers and not them, that is a leverage for ICASA not so reduce interconnect as they put Cell C out of business and they introduced Cell C as the third mobile operator for competition.

Rob

 

[rubble]

the R1.25 is the rate that the operators charge each other per minute. let's say a CellC phones Vodacom, Vodacom will charge CellC R1.25, however the customer might pay let's say R2.00. +-R0.75 profit to be made.
so, if the rate is dropped to 60c, CellC will pay Vodacom 60c, and if the customer is charged R0.75 extra, the customer will only pay R1.35. CellC still makes R0.75 on a call.
in the end, in both cases 75c potential profit.
so the customer pays less per minute and the operators still make the same amount of money if you nett off customer to wholesale price

Problem comes in now where other ECNS licencees are paying R1.25 to send calls to Vodacom or Cell C but they are only offering less than half that for calls they send to the ECNS licencees.

Rob

 

[kilos]

It would be interesting to see how much South Africans privately spend on the Telecoms cost (ie Cellular, Telkom, ADSL,Wifi or iBurst ?)

Cellular R1000 (2 cellphones)
Telkom R750
R1750 excl ADSL accounts
These monthly figures are shocking, lets say the average SA spends R100 on his cellphone 20+ million population * R100/month = R2 billion/month