MTN’s 1,500% interconnect price increase

MTN’s massive 1,500% interconnect price increase

Industry player says that MTN is accustomed to profiteering off opportunistic greed, and to fighting and obstructing the regulator and fair competition

We feel personally about our customers' interests and our profits

"Industry players say" ... that providing comment without emotive words has proven difficult. "We believe it is because we are involved," said an industry player. "It's our bottom lines that are affected here," he added, pointing to his own bottom. "We thought of calling MTN bottom feeding scum, but we believe that would be unfair," he added, in a generous concession to bottom feeding scum everywhere, and implicitly admitting the contradiction between scum, which floats on the top, and bottom feeders, which feed on the bottom.

He said that the ITR charged by MTN was an attempt to bring into equilibrium the significant outflows of money from South Africa.

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You fighters for economic equality and all that is pure and holy in the world, you!

And next week they will complain that users are abusing their network for OTT VOIP services.

It is amazing how operators keep blaming the operators from other countries for the high interconnect rates. Amazing that if all the operators in all the countries are complaining about the high inter-connect rates who is in fact the guilty ones?

What I would like to know what MTN charges Vodacom and Cell C to terminate on the MTN network elsewhere in Africa.

I don't feel sorry for MTN. If they put up a fight to get interconnect fees elsewhere reduced then I would sort of see their point. This - at best - was a case "operators in other countries are ripping off our customers so lets respond to ripping of their customers".

“Any perception that this inter-operator cost affects the SA consumer is inaccurate. It should be understood a higher ITR charged to our international interconnect partners is an international inter-operator cost and does not impact or affect the retail rates charged to our MTN subscriber phoning international destinations,” he added.

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Ugh, they're such weaselly little ****s. Sure, those high interconnect rates aren't paid for directly by the person on MTN, but making it more expensive for people I know to call me DOES count as affecting me. Don't try and spin it as just some behind-the-scenes cost that involves making money from some other international faceless big company. That cost gets paid for by people who are trying to call me.

Soon all operators will wonder why everyone is using VOIP bypassing their expensive interconnecting extortion.

I would rather pay Whatsapp than pay MTN

“A large number of MTN’s international carrier partners charge ITR’s significantly more than the rate of USD 0.25 as charged by MTN prior to the decision taken by Icasa,” said de Vries.

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I've been closely involved in this field for years and the dynamics are very clear. There are millions of minutes coming into MTN from around the world. Foreign operators can contract with MTN directly or via other operators who have interconnects (as I did). The pricing is quite competitive and if one international carrier charges too much, another will do the job for less.

In one sense, incoming traffic is a monopoly as you have to ultimately go through MTN as a supplier to make calls to their subscribers. Much of the competition used to centre around least-cost-routing (using sim cards), which was the only workaround to the monopoly, but with the reduced MTR, this potential had decreased (until recently!).

MTN has a stake in BICS (Belgacom International Carrier Services) and wanted all international traffic to go through them. It also figured that if it inflated the price, it could boost the revenue via BICS. This is what one of our operators in Zimbabwe has done effectively via their international carrier (forcing international callers to pay >$0.30 when the local interconnect was $0.08).

The other alleged game (hard to prove) was to charge BICS lower interconnect and therefore capture a bigger share of the international market.

A number of governments have intervened to push the international rates up a little bit (Pakistan, Ghana, for example). I think this is excellent if it boosts forex for SA, but then the forex must actually accrue to South Africa, and there must be no dodgy deals to boost the rates (as is the case with Ghana, I suspect). Nor must the price be too excessive, as you penalise expats (ie in neighbouring countries) who have been forced to look for job opportunities elsewhere but still have family, friends and business contacts in SA).

So if this is the norm then why is MTN the only ones doing it in S.A.? Odd.

abbott10k said:

So if this is the norm then why is MTN the only ones doing it in S.A.? Odd.

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MTN says it's the norm for international carriers, not SA ones. And I can understand that they want to keep money in the country, this will cause an outflow, which is not good for the economy.

But yes, strange that they are the only ones that do it. Perhaps the others wanted to but decided to hold back. Or perhaps MTN is wrong in their reasoning.