Cellular operators have ‘fleeced’ the public
This year has seen a national debate arise surrounding call termination rates charged between local cellular operators. The argument has brought forth a number of industry experts who are eager to voice their opinions regarding the interconnect situation.
Craig Young, Managing Director for communications software group UNISON, is one industry stakeholder who believes that the public “have been fleeced” regarding the cellular rates saga.
According to Young the fact that cellular operators Vodacom and MTN have “been able to build businesses on alternative routing” without changing costing policies suggests that “something has gone wrong” within the industry.
In fact Young believes that it is “highly likely” that some level of collusion has taken place between these operators. This statement is supported by the Competition Commission’s announcement earlier this year that it would be investigating both Vodacom and MTN for anti-competitive behaviour.
Young believes that over the years South Africans have become complacent in accepting high communication rates in a country where mobile networks are “vital”, adding that South Africans in general “have not been vocal enough” regarding high costs.
“South African business continues to do what it does regardless [of how call rates increase],” said Young who “can’t think of a sizeable entity which has closed its research and development departments due to the cost of telecommunications” despite these numbers having gone “through the roof”.
Is ICASA up to the challenge?
According to Young the growth of mobile networks and communications in South Africa has prompted the regulatory board, which was previously “set up to oversee broadcasting in general”, to “unpack its authority and governance policies within the mobile environment”.
As a result Young believes that ICASA “no longer has much of a position” within the communications environment adding that their “standards and requirements are generally not adhered to”.
The solution suggests Young is for the regulator to take a more fractional approach to the task at hand; addressing the technical, financial and licensing aspects in a more separated fashion.
This may involve ICASA rethinking its policies with regards to how it deals with the mobile market in future added Young, who believes that big enterprises may have “too much pull” within local government and regulatory frameworks.
The future of mobile communications
In future Young pointed out that a more competitive mobile space with five or more service providers offering packages aimed at different wealth brackets would be an ideal.
In addition Young believes that a mobile offering from Telkom would be welcomed, adding that the company would have “gone into this space a while ago” had it not been for its controlling share in Vodacom.
The fixed line operator has since announced that it plans to involve itself in the mobile market in 2010.
Young believes that “we have a propensity to create monopolies in South Africa”, adding that this trend must be broken before true movement in the local mobile space can be seen.
Nonetheless Communications Minister Siphiwe Nyanda announced in November that MTN, Vodacom and Cell C had come to an agreement regarding an initial reduction in interconnect fees. This agreement has however come under fire after reports surfaced that the Department of Communications had negotiated a worse deal for consumers than ICASA had initially suggested.
Cellular operators fleecing customers? Give your views
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