The high mobile interconnect rates, peaking at R 1.25, have come under fire for being one of the major stumbling blocks in reducing the cost of telecoms and voice services in South Africa. The latest support for lower wholesale termination rates comes from an unexpected source – the previous Vodacom CEO Alan Knott-Craig.<\/p>\n
Knott-Craig told delegates at Internetix that he believes that a drop in interconnect rates is one of the ways in which the local telecoms market can be made more competitive and lower costs to consumers. Knott-Craig further advocated a symmetrical interconnect rate, replacing the current asymmetrical rate.<\/p>\n
The Independent Communications Authority of South Africa (ICASA) recently released their third set of Draft Interconnection Regulations, but did not stipulate wholesale termination pricing – something which is most likely related to legal hurdles in the Electronic Communications Act.<\/p>\n
Knott-Craig is not particularly impressed with ICASA’s progress, saying that the focus should not be on creating water-tight regulations to lower interconnect costs. A more productive approach, according to Knott-Craig, would be for ICASA to get industry players to agree on lower and symmetrical interconnect rates. According to the ex-Vodacom CEO an interconnect rate of 60c per minute will most likely keep all stakeholders ‘fairly happy’ while at the same time halve the current rate charged by the mobile operators.<\/p>\n
Neotel CTO Angus Hay in turn supported a cost-based interconnect regime, something which he believes will ‘move the industry’ and result in lower costs to consumers. Telkom SA MD Pinky Moholi added that she also believes that interconnect rates are too high and should be dropped, but said that the rates should be negotiated with industry and not remove the value proposition for potential investors.<\/p>\n
Recent media comments by Vodacom, MTN and Telkom however suggests that they are unlikely to reduce interconnect rates unless there is significant regulatory and\/or political pressure on them.<\/p>\n