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Telkom to 'adjust' prices
Telkom to 'adjust' prices
Jul 12 2005 03:09:08:200PM
By: Shoks Mzolo
Johannesburg - Telkom will with effect from August 1 adjust its average prices for services by 3.5% below the rate of inflation as measured by the CPI, replacing the current cap of 1.5%.
This emerged following the new price cap framework approved by Communications Minister Ivy Matsepe-Casaburri this month.
The Independent Communications Authority of South Africa (Icasa) noted on Tuesday that the new regulations, yielding lower prices, would require the fixed-line monopoly to substantially increase its productivity, thus offering various benefits for consumers.
Consequently, lower prices for certain services are on the horizon while others are set to adjust slowly and remain in line with inflation as Telkom rebalances its prices to bring them in tandem with costs.
In sync with cost of living
However, in real terms, overall tariffs are expected to fall that would in the long run be in sync with the cost of living.
The new set of rules was finalised following an extensive consultative process, including public hearings.
It elicited several submissions from various parties including consumer interest and rights groups as well as Telkom among other telecommunications players.
Icasa noted that the public was increasingly aware of the effects that the high costs had on individuals and the cost of doing business in South Africa.
Benefit users
According to the regulator, these rules would benefit not just the economy but residential users.
The company will file for new tariff changes to adjust prices for its services in terms of the new regime on July 22.
These prices, which will either match or exceed the prevailing ones will come into effect on September 5 as opposed to September 1 owing to internal processes.
Although the incumbent is not expected to file lower rates, in a move that was probably designed to ensure Telkom does not undercut the second national operator, the incumbent could reduce prices for certain items after filing.
In another development, the department of communications, will on July 14 and 15 host 150 people - mostly from the private sector - to discuss the cost of telecom services in the country.
Icasa, Telkom, mobile operators and consumer groups have been invited.
High tariffs
In his State of the Nation Address earlier this year, President Thabo Mbeki said the government believed that the "unacceptable situation" in which some of the country's tariffs are 10 times those of developed nations "will soon become a thing of the past."
However, despite the deregulation of the market, a reduction in costs has not filtered through to end-users who still pay what consumer groups deride as exorbitant and monopolistic rates.
Telkom to 'adjust' prices
Jul 12 2005 03:09:08:200PM
By: Shoks Mzolo
Johannesburg - Telkom will with effect from August 1 adjust its average prices for services by 3.5% below the rate of inflation as measured by the CPI, replacing the current cap of 1.5%.
This emerged following the new price cap framework approved by Communications Minister Ivy Matsepe-Casaburri this month.
The Independent Communications Authority of South Africa (Icasa) noted on Tuesday that the new regulations, yielding lower prices, would require the fixed-line monopoly to substantially increase its productivity, thus offering various benefits for consumers.
Consequently, lower prices for certain services are on the horizon while others are set to adjust slowly and remain in line with inflation as Telkom rebalances its prices to bring them in tandem with costs.
In sync with cost of living
However, in real terms, overall tariffs are expected to fall that would in the long run be in sync with the cost of living.
The new set of rules was finalised following an extensive consultative process, including public hearings.
It elicited several submissions from various parties including consumer interest and rights groups as well as Telkom among other telecommunications players.
Icasa noted that the public was increasingly aware of the effects that the high costs had on individuals and the cost of doing business in South Africa.
Benefit users
According to the regulator, these rules would benefit not just the economy but residential users.
The company will file for new tariff changes to adjust prices for its services in terms of the new regime on July 22.
These prices, which will either match or exceed the prevailing ones will come into effect on September 5 as opposed to September 1 owing to internal processes.
Although the incumbent is not expected to file lower rates, in a move that was probably designed to ensure Telkom does not undercut the second national operator, the incumbent could reduce prices for certain items after filing.
In another development, the department of communications, will on July 14 and 15 host 150 people - mostly from the private sector - to discuss the cost of telecom services in the country.
Icasa, Telkom, mobile operators and consumer groups have been invited.
High tariffs
In his State of the Nation Address earlier this year, President Thabo Mbeki said the government believed that the "unacceptable situation" in which some of the country's tariffs are 10 times those of developed nations "will soon become a thing of the past."
However, despite the deregulation of the market, a reduction in costs has not filtered through to end-users who still pay what consumer groups deride as exorbitant and monopolistic rates.
