Telkom explains 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. These rates were criticized by other operators as being anti-competitive and an attempt by Telkom to stifle competition.
The rates, which range between R 0.59 and R 1.07 during standard time, came as a surprise to many as it is more expensive to carry a call from Telkom’s side to the other operator than it is to make a full local call using the incumbent’s internal network.
Telkom explains that the minimum charge is equal to their long distance minimum charge.
“Most VANS only have one Point Of Interconnect (POI) which means that Telkom has to carry all calls destined for the VAN to this single point. For instance, if a VAN’s Point of Interconnect is located in Cape Town, Telkom has to carry all calls originating from Gauteng destined for this VAN over long distance to the POI and one cannot compare it with Telkom’s local minimum call charge,” Telkom’s Steven Hayward, Managing Executive: Retail Marketing, explains.
“Calls will be charged per second with a minimum charge per call. The minimum charge covers the cost of setting up the call and covers the first period of conversation time,” Hayward pointed out.
Hayward gave the following Rands and Cents example: “A 90 second call to a VAN with a per minute rate of R0.79 (R0.01331 per second – incl VAT) during Standard time. The minimum charge of R0.72 (incl VAT) is applied the moment the call is answered and covers the initial 55 seconds of talk time with per second billing being applied on the remaining 35 seconds. A 90 second call to this VAN in Standard time -will cost R1.18 (incl VAT).”
Hayward said that the same methodology is applied to all VANS with initial talk times varying from operator to operator depending on the applicable per second rate. The initial talk time is calculated by dividing the minimum charge (R0.72 incl VAT) by the applicable inclusive per second rate.
Many questions were also raised about the standard interconnection agreements, and Telkom pointed out that the retail billing methodology and call charge structure for calls originating on the Telkom network and terminating on that of another licensed operator do not form part of the interconnect agreements.
These newly released rates are now in the hands of ICASA, and after approval by the Communications Authority operators like Neotel, DataPro, Storm, Internet Solutions and Verizon Business will be able to carry calls from the Telkom network to their own. The net result is that these other operators will now be able to launch voice services competing directly with Telkom.
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