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but that is over 15 years, they should be droppedInterconnection rates were 20c in 1994, but Vodacom and MTN managed to convince Icasa to allow them to increase them by 635% to the current R1.25 shortly before Cell C entered the market.
The other key point we can take from this whole saga is the fact that government cannot play the role of policy director in sectors in which it is heavily invested, because it may be looking after its own interests and not those of South African consumers.
Meanwhile, the government has denied suggestions that the proposed changes to mobile billing structures were sparked after President Jacob Zuma received a flurry of 'please call me' texts from ANC Youth League leader and pay-as-you-go caller Julius Malema.
"Comrade Julius is usually out of credit," confirmed a Youth League insider. "But he always has a lot to say."
This what I suspect as well. Now that Telkom will be starting their own mobile network, initially it will help telkom if interconnect rates are dropped so that they can become fairly significant players in the market. Government has reason for everything even if it isnt in our best interests, dropping interconnect rates is good for telkom, and therefore good for government.I think that the answer lies in Telkom's entry into the mobile industry.
Cost of entry would be high if the interconnect rates were high as Telkom is not a major player. With Telkom (government) being the only remaining "trading" potential cash cow for the government (ANC?) now that VC has gone, it makes total sense to reduce any costs that it (Telkom) cannot control directly to minimise costs of entry and sustainability.
Call on Big Brother for help as in the past
I dont see this happening, even if the lines are running at a loss, can you imagine the loss of income should LLU go ahead? Consumers would flock to other ISPs in droves and there would be an incredible loss of earning from fixed lines for telkom. They would rather have the lines run at a loss, than have the majority of their clients leave them.LLU is coming...2011...telkom are "defending and growing their existing profits"...But, they will release it...when it suits them as per profits from their massive push wih FTTH and mobile.
They claim landlines are currently running at a loss for them. They cling to it nonetheless.
I dont see this happening, even if the lines are running at a loss, can you imagine the loss of income should LLU go ahead? Consumers would flock to other ISPs in droves and there would be an incredible loss of earning from fixed lines for telkom. They would rather have the lines run at a loss, than have the majority of their clients leave them.
Since S.A. are now Members of the BIG G20 should we not now Compare
the Price Structures of the 20 Members. Communication, ADSL, Penetration,
Subscribers. The EU had a couple of month ago the SMS Costs investigated,
it stated that a SMS is a byproduct of the Cell Phone, so it hardly costs
anything. A SMS goes seconds on the connection but no Call. Prices dropped.
But a more cynical analysis of the political will to solve the conundrum would point out that only now that government is no longer benefitting from the massive profits generated by Vodacom is it getting serious about regulating interconnection.