Vox stops inbound call rebates to customers due to lower termination rates

Vox has informed customers that it will no longer be able to pass on inbound rebates from 1 November 2018.

The move is a result of ICASA lowering termination rates, which impacts the charges network operators can charge one another.

“Interconnect rates have reduced between 75% and 94% over the last 14 years,” said Vox.

“Although this ‘tax’ used to inflate call charges, it is also a form of income for the terminating operator. These inbound charges are used to cross subsidise outbound rates and fund network maintenance charges.”

Vox added that dominant mobile operators were the ones who benefited the most for many years from these termination rates.

As a “non-significant” fixed line player, however, inbound interconnect fees have dropped from 37c in 2011 to 10c in 2018 – and finally to 6c by 2020.

“This is an 84% reduction in potential income. Vox used to pass a portion of inbound income back to its customers in an effort to reduce their telecommunication expenses. With rising maintenance charges, inflation-based labour costs, and a weakening exchange rate (along with the rate change) it is not possible to continue with these subsidies,” said Vox.

Vox has followed the reduction in mobile terminations rates and passed a significant benefit to its customers, though, it added.

Customers should also be aware of operators charging inflated rates, especially if they are using “Cellular Least Cost Routing” to terminate calls, said Vox.