The mobile operators have not culled the consumer rate applied to least-cost routing (LCR) providers, even though direct interconnect rates have come down, says alternative telecoms company Vox Orion.
Speaking to ITWeb, Vox Orion MD Jacques du Toit said - while interconnect rates to Telkom have been culled - providing an LCR service in its current form is becoming more difficult for all players.
LCR providers give a 24% discount on the retail rate for mobile calls. However, Du Toit says that, while Telkom is reaping the benefits of lower cost calls, thanks to interconnect, the actual retail rate for LCR providers has remained the same.
“We are still paying the same rate with the same discount,” he says. The trouble is that Telkom can now offer a business service at a discounted rate, because the company pays mobile operators a smaller interconnect fee, and applies its 40c mark-up to the customer.
The current interconnect rate sits at 89c per minute if operators terminate calls on a mobile network. The rate came down at the beginning of March from R1.25, after public and political pressure forced the operators to lower the rate.
However, another rate cut is expected and possibly soon, following the Independent Communications Authority of SA's announcement that it wants rates down to 65c in July.
Operators will likely fight this tooth and nail, since they are already feeling the pinch from the first cuts.
Vox says Telkom can now pass on that rate to its customers, while LCR providers are being held to the original R1.25 plus discount. Du Toit says it is becoming harder to compete with Telkom, since many customers are looking for at least a 10% saving over Telkom's charges.
To remain competitive, LCR providers need the operators to really look at changing the rates they charge.
Despite the call for a lower rate, Du Toit says Vox is on firm ground, since it is migrating many of its users onto its own network. Since it was awarded an iECNS licence, it can now take advantage of the interconnection rates.
However, Du Toit says it will take some time for it to bring all its customers onto the network. He adds that, in the meantime, operators must come to the party.
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