Unlimited, untimed calls

He said that in the 30 OECD countries, average baseline prices for broadband Internet access using asymmetrical digital subscriber line (ADSL) technology – which relies on fixed copper lines to transmit content – have decreased by 17% between 2002 and 2004, while downstream speed increased by 512 kilobits per second, which is 10 times faster than a dial-up connection.

When compared with OECD countries, South Africa’s prices for broadband connectivity are the highest, while connection speeds are among the lowest, according to Reynolds.

International experience shows that capping the amount of content users are able to download “has the potential to significantly stunt the growth of broadband”, said Reynolds. “By doing this, users spend less time online and don’t experiment with higher-bandwidth services.”

Among these services is Internet telephony – using your Internet connection in order to make a voice call anywhere in the world. He referred to the take up in OECD countries of Skype, a product which allows people to make free calls to anyone who has the product. If you want the call to be terminated on a landline, you pay a small fee. “By using Skype,” said Reynolds, “you would cut the cost of the OECD’s average residential telecoms basket by 28% and the international basket by 81%.” He said that if you exclude the average line rental cost (the fixed fee paid to have a telephone line), a 62% reduction in call charges results.

On the telephony front, he said there is a move towards higher fixed monthly charges, but lowered variable charges: “Operators are offering customers bundled minutes with their packages, as well as lowering the overall charges for calls. Also, fixed operators offering a greater variety of tariff options in response to competition from cellular, cable and Internet telephony services.

Interestingly, South Africa seems to have mover the other way; the fixed monthly cost is lower than the OECD average, but when comparing a telecoms consumption basket (which contains a representative mix of local and long-distance calls without special discounts), South Africa is more expensive than any other OECD country.

Mobile operators are offering customers packages which include unlimited calling to a few numbers (typically on the same operator’s network), lower-cost subscription plans with a “bucket” of minutes, prepaid minutes that expire quickly if not recharged and unlimited mobile data plans.

France Telecom, for example, has a package that offers a flat rate for both mobile and fixed calls in Europe and North America for 79 euros (around R639) a month.

Swedish mobile firm TeliaSonera has a package for which customers pay 74 Swedish krona (around R63) a month for a service which enables untimed calls to mobile phones and fixed lines. Users then pay the equivalent of 59c for calls to fixed lines and TeliaSonera mobiles, R1,70 a minute for calls made in peak times to mobiles on other networks, and 94c for off-peak, off-network calls.