Time to get tough

Citing its experience in Tanzania, where that country's regulator is alleged to have meddled in its pricing model, Vodacom's Government relations and regulatory executive Phakamile Pongwane warns Icasa of the unintended consequences of intervening in SA's interconnect saga. "We now don't have much money to spend on network expansion in that country."
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Oh boo-fricking-hoo...

Maybe my understanding of business is a little flawed, but I always thought that building a network was an up-front investment in your own company's growth, and by building infrastructure you are betting on a decent return on investment to cover the original capital expenditure.

Vodacom is a spoiled child of SA telecommunications. They've become so used to being able to fund growth out of the obscene profits they've been making that they have no idea how to manage investment against return. It's about time they learn how everyone else in the real business world grows their businesses - you don't always get to invest money you already have.
 
Virgin Mobile CE Peter Boyd questions the rationale used in arriving at current interconnect charges. "How do you justify the 554% increase in interconnect charges over an eight-year period?"
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A question that ICASA seems incapable of answering!

Vodacom's Government relations and regulatory executive Phakamile Pongwane warns Icasa of the unintended consequences of intervening in SA's interconnect saga. "We now don't have much money to spend on network expansion in that country."
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Shame, come back to earth.
 
good article...

Tanzania has reduced the interconnect fee regularly - i don't have the figures but it is currently around 6.9 US cents!

there really is no debate here - 545% is an argument and conclusion all by itself
 
The argument that nobody would serve the poor communities of seriously off base, if there profit to be made, even if it's only a cent/minute they would maintain the product for low end users, What's being fought about is the R1.19/min that is being made which has absolutley no releation to offering the service.

If I recall, one of the telecom magazines I get was discussing operating costs in low GDP per cap countries and being able to offer connections at less than $5/month and still make a profit... that less than 40 bucks!

D
 
We subsidizing the poor all of a sudden? That's the biggest load of crock I've heard this year.

Please can someone tell me how they subsidize the poor since the price of pay-as-you-go is the same where ever you go, and it costs more to make a call on pay-as-you-go than it would on contract.
 
The issue of MTN should also be drawn to the discussion. In Swaziland you had to pay R 95 for a starter pack (In January 2007) & there is no other network-only MTN Swazi. IF you send "please call me" you are charged something like 80 cents. In S.A. you get a starter pack less than 5 rand (excluding airtime) and free "plse call me". The issue i am having here is that MTN has been charging other african countries more and subsidising us here in S.A.
Is it not possible therefore for them to offer lower interconnect fees?
 
First : First 545% is stated and later on 554% - which one is the correct figure?

Now : If Vodac and MTN would stop sponsoring every [censored] sports event, surely there would be enough money left for network maintenance should they be forced to lower their ridiculously overcharged interconnect fees?

Stop moaning and listen to what the consumers have to say... after all we pay your salaries.
 
The_Librarian said:
First : First 545% is stated and later on 554% - which one is the correct figure?

Now : If Vodac and MTN would stop sponsoring every [censored] sports event, surely there would be enough money left for network maintenance should they be forced to lower their ridiculously overcharged interconnect fees?

Stop moaning and listen to what the consumers have to say... after all we pay your salaries.
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MTN and Vodacom have a combined advertising budget of close to R1 billion. Sir Richard Branson asked us to look at the plush headquarter offices of these two and gauge how much we are being ripped off. The largest rise in interconnect fees came just as Cell C entered the Market thus reeking of anti-competitive collusion. ICASA will take two years to come up with an ADSL style regulation with more holes than Swiss cheese. Vodacom's new empowerment deal will more likely empower many already empowered ANC bigwigs. Big business will continue running this country and screwing us with impunity. Things don't look too rosey.
 
If prices where lower everyone could make their own calls without being subsidised. And won't need to make "please call me SMSs".

What a crock!
 
look, its ICASA. do they ever do anything besides say they looking into it? no. don't hold your breath.
 
So this really does answer the question I asked about interconnect fees and current contracts.

http://mybroadband.co.za/vb/showthread.php?t=76723

Basically, I can sign away the next two years of my cell freedom with out worryinh about ICASA.

On another note:
Something that occurred to me for the first time this week when considering whether to stay with Cell C or MNP to one of the others is that being a Cell C subscriber means that there is a 92% chance that I will pay a higher fee per minute (R2.35 versus R1.65) because only 8% of the market is with Cell C.

Therefore if I change to MTN or VC my phone bill will be less, because there is a greater chance of cell calls terminating on the same network. Surely ICASA or the competion board must realise that this means that the Cell C is being disadvantaged.
 
the only reason icasa was created is because people wanted it, it's useless entity,hard any bark no bite what so ever.

mtn and vodacom celc is here to make money not friends,
 
This is make or break for ICASA. If they make the right move here I think we can all look forward to a brighter future for the regulator.

If not, they will have a hard time gaining back any credibility whatsoever.
 
A good article, we need more of these.

Over the past eight years interconnect fees have increased by 545% from 20c in 1999 to 129c in 2007.
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If these 2 companies saw their subscriber base grow as it did in the same period, the cost should surely be coming down. The abovementioned figure is theft at a grand scale.

Anyone with a basic understanding of economy of scale should realize that with their subscriber numbers they must be making too big a profit on this.


With Vodacom and MTN having said to have raked in combined revenues in excess of R15bn in interconnect fees over the past four years, it's unlikely that they would give in to regulatory intervention without a fight - both being renowned for their propensity to litigate whenever their revenue base is encroached.
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Maybe a class action against these two for dropped calls may work seeing that they have made billions. I approached Vodacom on the issue of dropped calls and they basically told me to F%$off.
 
eremos said:
This is make or break for ICASA. If they make the right move here I think we can all look forward to a brighter future for the regulator.

If not, they will have a hard time gaining back any credibility whatsoever.
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i think you are 100% right

and after this the tests of strength for ICASA are lined up for miles....
 
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@nimo Not sure if this is relevent but you used to be able to call 119 after a dropped call to reconnect and you'd get the first 30 or 60 secs free....only trouble is you actualy have to dial the number. (kind of archaic term (dial)now :))
 
Robin Hood

MTN and Vodacom are like Robin Hood stealing form the wealthy giving it to wealthiest whilst screwing the poor in the process.

Guys if your in dead so concerned about the connecting poor in this country I dare you to channel your profits to their benefit.
 
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