Interconnect price cut by November

[rpm]

Interconnect rate cut by November

Cost-based interconnect rates on the cards before the end of the year according to DoC policy directive

 

[Alastairo]

Interconnect charges

It's about time that this happens, I am glad that government has got the guts to start dictating changes. It has been a ripoff since day one of cellphones.

 

[Shake&Bake]

Encouraging news.

Let us hope that this continues in the right vain to help stem the tide of cash from our wallets.

 

[Johnfpro]

It's about time that this happens, I am glad that government has got the guts to start dictating changes. It has been a ripoff since day one of cellphones.

That's quite correct but there were vested interests with Telkom owning a major share of VC. There's no point for them keeping inter connect tariffs high if they (government) cannot get a share via dividends.

Wait, I'm sure there'll still be a twist in the tail with this one. Hope I'm wrong though.

 

[Sting]

That's quite correct but there were vested interests with Telkom owning a major share of VC. There's no point for them keeping inter connect tariffs high if they (government) cannot get a share via dividends.

Wait, I'm sure there'll still be a twist in the tail with this one. Hope I'm wrong though.

The twist will be Telkom entering the mobile market! Remember that the current interconnect tariffs do not favour Telkom. So the price cut will be conveniently timed to hail their entrance to the mobile market.

The more market share Telkom mobile grabs (whether it be from CellC, Virgin, Vodacom or MTN) the more profits they will generate, ergo higher dividends to the government via their Telkom shareholding.

Win-win for the DoC but not necessarily for us consumers!

 

[bex.cpt]

It's about time that this happens, I am glad that government has got the guts to start dictating changes. It has been a ripoff since day one of cellphones.

As usual ICASA & the "government" is late to react. Namibian communication authority has done this months ago. This is a drop in the vast ocean of mobile rip offs. Yes it's a step in the right direction, hopefully it is step 1 of many.

 

[bekdik]

And then one wonders where they will move the income to. I don't believe that MTN & Vodacom will give up this piggie trough filling source without a fight and I suspect the first round of the fight will be to put up charges somewhere else.

 

[Lightscribe]

The twist will be Telkom entering the mobile market! Remember that the current interconnect tariffs do not favour Telkom. So the price cut will be conveniently timed to hail their entrance to the mobile market.

The more market share Telkom mobile grabs (whether it be from CellC, Virgin, Vodacom or MTN) the more profits they will generate, ergo higher dividends to the government via their Telkom shareholding.

Win-win for the DoC but not necessarily for us consumers!

I agree. There were no good intentions towards the consumer. They dress it up as a move to help the consumer, but it is pure greed on the part of our notoriously corrupt government, as 39% telkom shareholder.

Disinvest in telkom and use the profits from the sale of the 39% share, to boost the R1bn in the Universal Service Fund, held by the Universal Service and Access Agency of SA.

Use the money to implement a consumer consulted Broadband Policy for South Africa, "to facilitate the provisioning of affordable access to broadband infrastructure to citizens, business and government and to also stimulate the usage of broadband services at national, provincial and municipal levels."

Implement LLU already!!!

 

[guest2013-1]

I agree. There were no good intentions towards the consumer. They dress it up as a move to help the consumer, but it is pure greed on the part of our notoriously corrupt government, as 39% telkom shareholder.

Disinvest in telkom and use the profits from the sale of the 39% share, to boost the R1bn in the Universal Service Fund, held by the Universal Service and Access Agency of SA.

Use the money to implement a consumer consulted Broadband Policy for South Africa, "to facilitate the provisioning of affordable access to broadband infrastructure to citizens, business and government and to also stimulate the usage of broadband services at national, provincial and municipal levels."

Implement LLU already!!!

The government makes more over the long run by having shares in Telkom, not only in dividends but tax paid as well. Take away the 39% share you might see a bigger drop in budgetary allowance than if they didn't have those shares

 

[license]

"the DOC will present the policy to the Parliamentary Portfolio Committee on Communications when it meets on Wednesday coming and will encourage its implementation"

In other words, if Parliament say no - then we're back to the drawing board.

 

[Lightscribe]

The government makes more over the long run by having shares in Telkom, not only in dividends but tax paid as well. Take away the 39% share you might see a bigger drop in budgetary allowance than if they didn't have those shares

Well, then the consumer must smear some more lube, since I see no good coming from government having it's greedy fingers in the cellular industry also.

 

[mikef]

I still do not understand why so many commentators are of the opinion that lowering the interconnect fee will result in an immediate saving to the consumer.

Ignoring for a moment the potential saving on retail tariffs due to enhanced competition the interconnect fee is not directly charged to the customer - if it was the cost of "on net calls" should be R1.25 cheaper than "off net calls".

Also Telkom will benefit from this proposed drop far more than just due to their entry into the mobile network as they are currently paying R1.25 for calls from their landline network ending on the mobile networks while only receiving 0.25 for calls from the mobile networks ending on their landline network.

 

[guest2013-1]

I still do not understand why so many commentators are of the opinion that lowering the interconnect fee will result in an immediate saving to the consumer.

Ignoring for a moment the potential saving on retail tariffs due to enhanced competition the interconnect fee is not directly charged to the customer - if it was the cost of "on net calls" should be R1.25 cheaper than "off net calls".

Also Telkom will benefit from this proposed drop far more than just due to their entry into the mobile network as they are currently paying R1.25 for calls from their landline network ending on the mobile networks while only receiving 0.25 for calls from the mobile networks ending on their landline network.

The mobile operators blames interconnect fee's for the high peak (and almost equally high off peak) tariffs they charge the customers, especially if the call terminates on a different network to theirs.

I doubt it would be an immediate change in what we pay, but should be reflected in the amount of time we can spend on the phone from, for example, MTN to Cell C. Or MTN to Telkom landline.

The idea is also to bring this down enough to have an impact, as telco operators obviously compete with each other, so they'll try to make the other telco not able to compete on price to their network by making interconnect rates high enough (and it has been indicated that they "scam" together to make it viable for each party and bring in more money)

 

[guest2013-1]

Well, then the consumer must smear some more lube, since I see no good coming from government having it's greedy fingers in the cellular industry also.

Did they indicate in buying shares in all major Telco's?

 

[mikef]

Reading this article the impression being created is certainly not that the DOC believes that it is only competition which would result in lower rates to the public.

 

[Sting]

Reading this article the impression being created is certainly not that the DOC believes that it is only competition which would result in lower rates to the public.

Sorry, thought you had read it already! I read it before I posted earlier...

 

[mikef]

Sorry, thought you had read it already! I read it before I posted earlier...

The Times article is either extremely bad journalism or the are referring to something other than regulation to purely bring down "interconnect fees".

I quote:

After months of negotiations, the Department of Communications has now flexed its muscles to ensure that consumers will effectively pay "cost price" for making regular and video calls; for calls from cellphones to land lines and vice versa; text messages; Internet access and mobile TV - which would save consumers "billions of rands".

The department's director-general Mamodupi Mohlala, speaking from Geneva, confirmed yesterday that parliament's communications portfolio committee would be informed of the move on Tuesday, when the directive outlining the details would be released.

This week the department will issue a policy directive ordering the Independent Communications Authority of SA (Icasa) to put in place a pricing structure that would reduce cellphone costs ahead of the festive season.

I suspect it is bad journalism although it might be that even the DOC thinks regulating "interconnect fees" is the same as regulating consumer tariffs.

 

[krycor]

Doesn't the decision to impose it lie with icasa? and not the doc? if the doc push it thru icasa with least red tape there will be whining from operators and more importantly sets a new precedent as to what doc can achieve/removes a barrier.. also removes the "i" from icasa.