Unilateral cuts could backfire on cell groups

[mikef]

Another poorly researched/written article on the interconnect debate. I am disappointed as I expected better from Lesley Stones

MTN and Vodacom said last week they would cut the fee consumers pay for cross-network calls 19%.

Nyanda ordered the Independent Communications Authority of SA (Icasa) to slash rates consumers pay by November 30, by cutting the cross-network charge to what the service costs

Once again the MTR and retail tariff is confused.

Cell C CEO Lars Reichelt said the proposal offered no significant change to the current rate regime, and suggested a far more substantial cut of 40% to 75c.

No mention that the proposal also is for asymmetrical rates where they receive 75c but only pay 65c.

Link: http://www.businessday.co.za/articles/Content.aspx?id=84945

 

[Speedster]

mikef seems to think he is the authority in interconnect. Perhaps you should offer your services to ICASA / DoC / MTN / VodaCom / CellC

 

[mikef]

mikef seems to think he is the authority in interconnect. Perhaps you should offer your services to ICASA / DoC / MTN / VodaCom / CellC

Not sure what makes you think that - I have stated a few times that I am not an expert - however you do not have to be an expert to understand basic logic - something you do not seem to be able to comprehend

 

[Syndyre]

mikef seems to think he is the authority in interconnect. Perhaps you should offer your services to ICASA / DoC / MTN / VodaCom / CellC

Either way a lot of the articles have been fairly inaccurate, misleading or just wrong.

Calls from community service phones are linked for just 6c, and he doubted they were operated at a loss.

Since they're a condition of the network's licences and not something they do voluntarily I wouldn't be surprised if they operated at a loss.

 

[cavedog]

Awww shame so MTN and Vodacom will loose money now. God they ripped every 1 off for many years now. We are amoung the highest rates in the world!!!!!!

Just to make this clear. MTN to UK/US/AUS are charged R1.99 per minute during peak time. MTN to Vodacom/CellC are charged at R2.89 per minute!

Explain?????????? So the Operators can go to HELL! Drop the prices now!!!!!!

 

[chris2.0]

Remember the calls to the UK/US/AUS are ex Telkom charger - you have to add that...

But interconnection still sucks! Why can't the Gov of the day break Voda and MTN apart like the yanks did in the US? Vodacom in 3, MTN in 2...

 

[cavedog]

Remember the calls to the UK/US/AUS are ex Telkom charger - you have to add that...

But interconnection still sucks! Why can't the Gov of the day break Voda and MTN apart like the yanks did in the US? Vodacom in 3, MTN in 2...

I don't understand what you are saying?

If you make a call with a MTN PAYG sim you WILL ONLY pay R1.99 per minute to call to the UK/US/AUS so I don't understand what you are saying. This is what MTN charges. I called today to confirm and I can confirm for all 3 destinations its ONLY R1.99 per minute!

 

[mikef]

I don't understand what you are saying?

If you make a call with a MTN PAYG sim you WILL ONLY pay R1.99 per minute to call to the UK/US/AUS so I don't understand what you are saying. This is what MTN charges. I called today to confirm and I can confirm for all 3 destinations its ONLY R1.99 per minute!

This is not in agreement with their website tariffs which is R2.90/minute (Zone 1) for those destinations for both PAYG and contract.

http://www.mtn.co.za/Travel/International Calling/Pages/default.aspx?index=2

 

[cavedog]

This is not in agreement with their website tariffs which is R2.90/minute (Zone 1) for those destinations for both PAYG and contract.

http://www.mtn.co.za/Travel/International Calling/Pages/default.aspx?index=2

Nope its still R1.99 try it for yourself if you don't believe me. Anyways Lets take what you said. So International calls should be 1c more expensive than local calls to other networks??? :erm:

 

[mikef]

Nope its still R1.99 try it for yourself if you don't believe me. Anyways Lets take what you said. So International calls should be 1c more expensive than local calls to other networks??? :erm:

Not saying you are wrong (might be a special not reflected on the website) - just pointing out what the official quoted MTN tariff is. My calls are included in bundled minutes so I can not test myself.

The international leg is carried by Telkom AFAIK so those calls are based on Telkom charges. However the interconnect fee has little link to the retail tariffs as can be seen on the MTN PAYG per second call tariffs which are as follows:
Call Rates Peak Standard Off-Peak
MTN to MTN R 2.89 R 1.99 R 1.19
MTN to Telkom R 2.89 R 1.99 R 1.19
MTN to Other R 2.89 R 1.99 R 1.19

If you consider MTR part of the call cost this makes seem to make no sense considering MTN pays no MTR on on net calls, 29c on Telkom calls and R1.29 on other mobile networks (based on what has been reported). As the MTR revenue (ignoring the Telkom asymmetrical aspect) would to a large extent be eliminated by the MTR payments the effect of any decrease would not benefit MTN, VC or CellC at all so it is unlikely to result in retail tariff reductions. This also explains why the above rates do not differ as a result of MTR rates.

The perception of many is that if the MTR drops the operators will see a reduction in costs which they can pass on to the consumer - this is just not true. It is true that reductions in the MTR will shift profits from the mobile operators to the land line operators due to the asymmetrical rates that apply.