Telkom defends high mobile prices
According to the fixed line incumbent it is important for the Regulator to not look at the price of mobile services in isolation. They argued that there are many factors which influence the final retail prices, with capital outlay being one of the biggest factors to consider.
"Mobile companies need to recover the cost of capital but it is not a simple exercise, as price is a function of both profitable and non-profitable customers," said Telkom.
Telkom conceded that telecommunication services are a necessity in this day and age and can no longer be considered a privilege. They also agreed that the country’s growth is to a large extent dependent on growth in the telecoms sector. Telkom however urged the regulator to focus on the facilitation of effective competition rather than regulation to ensure competitive prices.
The big thrust behind Telkom’s presentation this morning was that the Authority needs to do a thorough market analysis to ascertain if there is market failure due to ineffective competition. From this analysis they will then be able to decide which regulatory tools are best suited.
The call for a comprehensive market analysis was reiterated by both Vodacom and MTN, creating the uncanny situation where these competing companies present a united front.
This call for more market analysis begs the question as to whether these companies, who stand to loose millions if the Regulator does get involved to reduce mobile call tariffs, are not employing delaying tactics.
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