The Communications Users Association of South Africa (CUASA) has welcomed government`s call for telecommunications prices not to unnecessarily add to the cost of doing business, says its president Ray Webber.
Webber was commenting on a recent newspaper article that quoted deputy communications minister Roy Padayachee as saying there would be a review of Telkom`s tariff structure.
Webber says that in light of excessive Telkom profits, a review of tariff structures would be "most welcome".
The article stated the government review was in line with President Thabo Mbeki`s statement that government would ensure that "administered prices do not unnecessarily add to the general costs of production and the inflationary pressures in our economy".
"Bearing in mind that government still owns 38.3% of the monopoly according to an official Telkom statement, we find it encouraging they are beginning to view the industry a bit more holistically. One can only assume that government has finally realised that SA`s excessive telecommunications and associated data communications costs are ultimately hindering the country`s progress and development," Webber says.
While Telkom will have to find a balance between adhering to government`s set inflation targets and maximising shareholder value, Webber says considering Telkom`s monopolistic situation, it should be able to deliver excessive shareholder value.
"In fact, it is our view that in the current monopolistic telecommunications environment in which Telkom finds itself, it would be more difficult for a Telkom executive to fall off his chair than it would be for them to turn an unhealthy profit," Webber says.
"In addition, our experiences indicate that Telkom appears to be a master at hoodwinking both government and the regulator into believing their rate regimes are competitive, when the reality is that Telkom continues to generate massive profits at the expense of both the average South African and business in general."
He says there is no real reason why telephone charges cannot drop substantially next year.
"However, it would be extremely naive to assume that such a decrease would actually occur without serious legislative and policy pressures from government or the introduction of effective competition, and I wouldn`t personally hold my breath while expecting these possibilities to be realised anytime soon," Webber says.
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