Interconnect rate cut by November
The Department of Communications (DoC) has indicated that it will issue a policy directive to ensure that wholesale termination rates are reduced to be cost based.
ITWeb reported that the new communications Director General Mamodupi Mohlala said that it was time for the DoC to “take a stand and make a concrete intervention on behalf of every consumer in SA.”
According to ITWeb “the DOC will present the policy to the Parliamentary Portfolio Committee on Communications when it meets on Wednesday coming and will encourage its implementation. The directive is the first of a three-phase initiative the department hopes to implement over the coming months to stem the cost of communication in SA.”
The Portfolio Committee on Communications is set to hold public hearings this week to have mobile operators bring down their “excessive and exorbitant” interconnection rates. The Committee previously proposed that mobile and telecoms operators drop the interconnection rates with effect from 1 November 2009 to 60 cents per minute during peak times.
The Committee further wants interconnection rates to be reduced by 15 cents annually on 1 November for each successive year until 2012 with the idea that this should result in reductions in the actual retail prices of telecommunications.
Vodacom has recently said that they believe ICASA should apply the principle of actual cost of terminating the call, plus a fair return for doing so. “International best practice has been to reduce mobile terminating rates over time using a glide path to avoid business model shocks, and prevent the scramble by operators for lucrative customers at the cost of excluding less profitable customers,” said Vodacom CEO Pieter Uys.
Research ICT Africa Director Alison Gillwald suggested an interconnect rate of R 0.25 instead of the current peak-time cellular interconnect rate of R 1.25 per minute. Gillwald said that R0.25 per minute can be seen as a conservative figure which leaves a fair margin for profit to operators.
Interconnect rate cut – comments and views
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