Telkom defends tariffs again

By Paul Vecchiatto for Telkom
Johannesburg, 29 Mar 2005

Telkom has defended its tariffs as US-based NUS Consulting again says its rates are among the highest in the world.

Last week, NUS Consulting released its latest survey, which says Telkom`s high tariffs "continue to hamper South African organisations in their efforts to compete in the world`s major markets".

According to the study, an international call made from SA to New York costs $0.74 (R4.44) per minute, compared to a New York to London call of $0.7 (R4.20) per minute. The study cites SA and the US as having the highest international call rates among the 14 countries in which most of South African telecommunications transactions take place.

These countries are the UK, US, Canada, Sweden, Finland, Denmark, Australia, Belgium, Germany, Italy, the Netherlands and Spain.

NUS Consulting MD George Rahr says while Telkom should be applauded for its 49% and 10% rate cuts for international and long distance calls, these cuts are insignificant when compared with the reductions in other countries.

Telkom media liaison officer Xolasi Vapi says Telkom`s tariffs compare favourably with other Organisation of Economic Co-operation and Development countries.

"For a long time Telkom has been using international calls and long distance national calls to subsidise the local call rate. We also have the problem of the cost of managing the local loop," he says.

Vapi says Telkom`s 28% price reduction in January for international calls was well received and the company has since seen an increase in the use of its network.

The NUS Consulting report states that SA is the most regulated of the countries surveyed. However, the company says this may change once the second national operator is launched as Telkom`s rival.

"Despite the introduction of the second network operator and the possible availability of voice over Internet Protocol, we foresee telecom rates holding steadily over the next 12 months," says the report.

The survey also shows that South African consumers experienced an average rate increase of 4.7% in their cellphone calls last year. However, cell call costs in the UK and Australia are the most expensive among the countries surveyed.

SA ranks as the third most expensive for a three-minute cellphone call at $1, with the highest being the UK at $1.16 and Australia at $1.06. The US has the least expensive cell call rates at $0.21 for three minutes.

NUS Consulting`s statements were not as harsh as they were last year, when Rahr accused Telkom of trying to "screw the consumer".

The Telkom parody site www.helkom.co.za has used NUS Consulting`s data to illustrate the high cost of Telkom`s charges and is using this data in its defence in Telkom`s bid to close it down.