Mobile Termination Rates (MTR) rates will, initially, be reduced by 36 cents from early next year, Communications Minister Siphiwe Nyanda announced on Thursday. Speaking in the National Assembly, he said the new agreed reduced mobile termination rates (MTR) by Cell C, Vodacom, and MTN would be 89 cents in peak times and 77 cents off peak. Currently, subscribers pay R1.25 in peak times and 77 cents off peak.<\/p>\n
There have been concerns that lower interconnect rates may not result in lower call rates with larger providers keeping prices at current levels to ensure there is not a sudden revenue and profit reduction. Many industry players, including Neotel CEO Ajay Pandey and ECN CEO John Holdsworth, said that the authorities must make sure that consumers benefit from interconnect rate cuts.<\/p>\n
“That said, we are positive that this move will benefit the consumer, provided the right mechanisms are put in place to ensure that the benefits of any reduction in interconnection is passed through to the consumer,” says Pandey.<\/p>\n
While there is no feedback from the bigger players as to whether they will pass the lower interconnect rates on to consumers, smaller telecoms operators have made it clear that they will cut their prices as soon as the new MTRs kick in – and maybe even sooner.<\/p>\n
Vox Telecom Group MD Doug Reed said that their Vox Telepreneur clients will receive a peak mobile call price cut from R 1.49 per minute to around R 1.05 per minute from 1 December – sooner than the 1 February and 1 March implementation dates of the lower rates. Reed said that Vox Telecom will ‘take the knock’ to benefit their customers.<\/p>\n
ECN CEO John Holdsworth also confirmed that they will pass any interconnect rate savings on to their customers as soon as it becomes available. Holdsworth added that competition is key to driving down telecoms costs, and that lower interconnect rates are of paramount importance to achieve this goal.<\/p>\n