Interconnect rates down to 89c

Peak hour mobile termination rates will fall from 125c per minute to 89c, while the off-peak rate will stay constant at 70c per minute, the communications minister said in Parliament today.

He delivered a ministerial report to the national assembly concerning his department's intervention into the high cost of interconnection rates – the cost for a subscriber to call another party over another network –  which will come into effect through Vodacom in February next year. MTN will only bring in the new rates from 1 March 2010.

Nyanda said all the network operators had agreed to a new rate and that they needed time to allow for the adaption of their systems. The systems and business models of a number of SMEs would also depend on the interconnection rate.

“I have also asked for the introduction of new and affordable retail products that will take advantage of the new interconnection rates by 1 December,” Nyanda said.

He added that he will now withdraw the ministerial directive that stated his ministry's intention to reduce the interconnection rate.

“We view the reduction of costs to communicate in a serious manner, not just on the wholesale but also the retail level. Further negotiations will be held with the network operators,” Nyanda said.

He further told Parliament that Cabinet had approved his programme of action to reduce telecommunications costs.

However, Nyanda indirectly acknowledged his announcement was not all he had hoped for from the network operators. “I just want to say that this may seem a small step, but it is small step that will help us.”

Nyanda added that he will be presenting the interconnection rates to ICASA.

Related stories:

• Interconnect cut leaves Icasa, De Lille cold
• ICASA commits to interconnect regulations

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