High tariffs are good for the poor: MTN exec
Nkateko Nyoka, the company’s regulatory affairs executive, told a telecommunications conference at Wits University last week that the high penetration of cellphones in SA – more than six in 10 people have one – was due to high call settlement fees between operators.
He compares SA with India, where cellular penetration is only 7 percent. He says India has not enjoyed strong growth because its interconnection fees are low.
"The only people who benefit [from lower interconnection fees] are the people who are already connected," Nyoka said. He explained that people in outlying areas tend to receive far more calls than they make. Because operators pay each other to interconnect calls, they can build infrastructure in areas that otherwise would not be profitable.
Some analysts have dismissed his comments, saying MTN is simply looking for a way of justifying a lucrative source of revenue. Arthur Goldstuck, MD of research firm World Wide Worx, says Nyoka is being disingenuous. Urbanites who phone poor people in rural areas tend to be poor themselves, he says. It’s the poor who are subsidising the poor.
Quite aside from assisting the poor, MTN has other reasons to protect interconnect fees which Icasa, the telecoms and broadcasting watchdog, wants to regulate. MTN generated R2,6bn from interconnect in the six months to June 30. Net interconnect – the difference between what MTN received and what it paid to other operators – amounted to almost R1bn.
Inet-Bridge
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