Neotel responds to Telkom’s new call rates

Telkom recently announced their new rates for calls that originate on their network but terminate on the networks of newly licensed telecom providers like Neotel. Neotel gives their views.

The new calls rates were criticized by many consumers and industry players for being far too high and too complicated. ITWeb quoted CUASA’s Ray Webber as saying that, “This is a time when call charges should be decreasing, and decreasing significantly, not increasing.”

“What chance do Neotel, the USALs and Vans have to really get customers and compete with Telkom, if these proposed rates are approved?” Webber added.

CUASA has called on ICASA to not approve Telkom’s new rates, with Neotel joining the fray by requesting that the Regulator have a good look at these rates before making any hasty decisions.

Neotel’s response

“We understand that the rates recently announced by Telkom for calls made from their network to those of their competitors are subject to approval by ICASA, and we are confident that ICASA will take the 70% increase in local call charges proposed in the new tariffs into consideration before making their decision,” Neotel said.

Neotel further finds it strange that Telkom is effectively harming their own customer base through the new pricing of calls terminating outside of their network.

“It is surprising to note that any telecom operator chooses to penalize only its own customers by charging them a higher tariff for making local calls to other networks, particularly when such customers may not always be able to appreciate whether the call is being made to a Telkom phone or to the phone of another operator.”

Neotel further questioned the way in which Telkom structured their business model for calls terminating on other networks.

“The world over, operators decide their interconnection pricing strategy based on a number of factors, and a large variety of countries, including many countries that Telkom has direct interconnects with, choose to charge a flat fee for interconnection, something which has little bearing on whether or not an operator chooses to offer peak and off-peak retail rates to its customers,” Neotel pointed out.

“It’s not clear why Telkom would choose to structure its own retail tariffs in this way, particularly when there will soon be compelling, simpler alternatives available to their customers.”


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Neotel responds to Telkom’s new call rates