Interconnect rates numbers

Good article - which clearly illustrates that a reduction in interconnect rates will have little immediate effect on the industry other than shifting profits currently made by the mobile providers to Telkom.

Edit:

In fact rather than leading to reduction in mobile tariffs this will put pressure on the mobile operators to increase rates:(
 
Last edited:
mikef said:
reduction in interconnect rates will have little immediate effect on the industry other than shifting profits currently made by the mobile providers to Telkom
Click to expand...
... and the other few 100 licensed ECS holders. Sure few of them have the financial muscle to challange the incumbents, however without the opportunity enabler of low interconnect rates, we'll be stuck with the current status quo for the long term.

It also depends on what Telkom does with the opportunity? They can either bank it or pass on the savings to their customers. Seeing as their biggest area of bleeding is the loss of fixed line customers, having rates to mobiles that are multiples, instead of just %s cheaper is one way to revive the attractiveness of their fixed line service.
 
Roman4604 said:
... and the other few 100 licensed ECS holders. Sure few of them have the financial muscle to challange the incumbents, however without the opportunity enabler of low interconnect rates, we'll be stuck with the current status quo for the long term.

It also depends on what Telkom does with the opportunity? They can either bank it or pass on the savings to their customers. Seeing as their biggest area of bleeding is the loss of fixed line customers, having rates to mobiles that are multiples, instead of just %s cheaper is one way to revive the attractiveness of their fixed line service.
Click to expand...

Agreed fully - however reading the papers and most of the news articles the expectation is that this adjustment should reduce mobile tariffs by an equivalent amount.

Let us hope that Telkom uses this opportunity to reduce adsl costs which are still way overpriced in world terms.
 
looking at those figures.. is it any wonder that Telkom doesnt have the money to properly implement their broadband layout? can u imagine what a R4billion saving would do? if used correctly...
 
mikef said:
Let us hope that Telkom uses this opportunity to reduce adsl costs which are still way overpriced in world terms.
Click to expand...

Telkom is very unlike to reduce tariffs unilaterally, unless it fears the competition.

So rather let's hope that the government applies the same pressure to Telkom.
 
I think that the table indicating that Vodacom's & MTN's revenues are positive and Telkom's are negative for interconnects hides a very sad truth. None of these companies are funding these interconnects themselves. It is a zero sum game, one network is paying and another receiving; but that is not the full story. All of this is being funded by the consumer. Telkom is not losing any profits because of the cost of interconnecting to the mobile networks... ALL of that cost is being passed on to the consumer.
 
arf9999 said:
I think that the table indicating that Vodacom's & MTN's revenues are positive and Telkom's are negative for interconnects hides a very sad truth. None of these companies are funding these interconnects themselves. It is a zero sum game, one network is paying and another receiving; but that is not the full story. All of this is being funded by the consumer. Telkom is not losing any profits because of the cost of interconnecting to the mobile networks... ALL of that cost is being passed on to the consumer.
Click to expand...

True that is why calling a cell phone from your landline is so expensive.
 
I don't buy Vodacom's excuse about backhaul. Their relationship with Telkom surely meant they either got discounts, or in some cases (as I was told by an ex employee) they got stuff (fibre in at least 1 case) for free. MTN might still have this excuse for a short period while they finance and build their own backhaul links, but I'm also certain they didn't only start building their own network this year.
 
Finally! An article that puts it into perspective, but where the CellC figures??! :confused::confused::confused:
 
arf9999 said:
I think that the table indicating that Vodacom's & MTN's revenues are positive and Telkom's are negative for interconnects hides a very sad truth. None of these companies are funding these interconnects themselves. It is a zero sum game, one network is paying and another receiving; but that is not the full story. All of this is being funded by the consumer. Telkom is not losing any profits because of the cost of interconnecting to the mobile networks... ALL of that cost is being passed on to the consumer.
Click to expand...

+1

I love it when these "service providers" say that it is netted so it isn't profit. What cr@p!! The whole amount is charged to the end user. Which means the "revenue" numbers are pure frofit otherwise why have such a high interconnect rate in the first place. Don't let these guys pull the wool over your eyes. They are all lying through their teeth. And when they give numbers for "paid to other operators" that excludes what they are receiving from the other operators. Where are those numbers???? :sick:
 
mikef said:
Good article - which clearly illustrates that a reduction in interconnect rates will have little immediate effect on the industry other than shifting profits currently made by the mobile providers to Telkom.

Edit:

In fact rather than leading to reduction in mobile tariffs this will put pressure on the mobile operators to increase rates:(
Click to expand...

I don't see this logic at all. The peak/max cost is like R2.85/min where R1.25 interconnect fee. Now i get that lessening/restricting of interconnect fee != lower consumer fee(as operator will just have a bigger % cost to play with) BUT it does mean companies like cell-c will have the option to say stuff you and drop it slightly even or telkom offering better to cell costs.

Can companies recoup it.. not if there is competition and albeit that there is a lack of it in SA, smaller companies have a lot to play for. You say increase rates.. but i think at worse they will keep it the same and internally claim/increase other portions of cost.

It does however kill sims even more.. and this gong to hurt them badly because albeit that SA market is approaching saturation.. peple using multi sims kept up the numbers.. this could kill numbers
 
krycor said:
I don't see this logic at all.
Click to expand...

I am assuming you are referring to my logic of putting upward pressure on mobile rates as opposed to reducing same?

My logic is simple - please explain if you consider it flawed. At the current level of interconnect fees all the mobile operators are making a substantial profit out of Telkom due to the disparity in the rates. Should the mobile interconnect rate drop by 30c some of this profit would be lost without any adjustment in retail rates. In order to keep their shareholders happy they will need to find ways to make good this loss - therefore creating upward pressure
 
You forget that the prices are "regulated" by ICASA and any price adjustments first have to be approved by the (albeit flimsy) regulator.
 
Speedster said:
You forget that the prices are "regulated" by ICASA and any price adjustments first have to be approved by the (albeit flimsy) regulator.
Click to expand...

I was not aware that mobile retail rates were regulated by ICASA - and even if they are the fact that the changed interconnect rates reduced their profitability would provide grounds to potentially justify an increase.
 
Another article that also has a more balanced reporting on the whole interconnect debate.

It is unlikely mobile operators will pass on lower interconnect rates to consumers, say analysts.
Click to expand...
 
mikef said:
I was not aware that mobile retail rates were regulated by ICASA - and even if they are the fact that the changed interconnect rates reduced their profitability would provide grounds to potentially justify an increase.
Click to expand...

Nope - that would precisely NOT be grounds to increase rates. The current rates submitted to (and approved by) ICASA allow for sufficient profit without the interconnect charge. The interconnect charge is simply meant to cover the cost of the carrier who terminates the call. ICASA, as parliament and the protfolio commitee recently pointed out, should not be there to guarantee profits for the the networks, they should ensure "fair" competition and justifiable fees charged to consumers.
 
You must log in or register to reply here.
Back
Top
Sign up to the MyBroadband newsletter
X