Communications minister Dina Pule has renewed her department's promise to step in and do something about SA's costly communications and operators' lack of transparency, but industry observers say consumers should not hold their breath just yet.
In her budget vote speech this week, Pule said the Department of Communications (DOC) "remains firm in its commitment of lowering the cost to communicate in pursuance of affordable prices for mobile, fixed and broadband services".
She added that she intends to issue a policy directive to the Independent Communications Authority of SA (ICASA) on transparent pricing of services such as SMS, voice and date "to ensure market pricing transparency for the benefit of our consumers".
The DOC, however, currently has a lot on its plate - including a web of accusations levelled against Pule, and a host of outstanding actions and decisions that need to be carried out as a matter of priority; including spectrum allocation, digital migration, the national ICT policy and the future of the country's communications core, Telkom.
Sooner or later?
In light of the challenges faced by the DOC, as well as their magnitude, analysts say South Africans may still have a considerable wait ahead of them in terms of decisive action on communication tariffs and transparency.
Africa Analysis analyst Dobek Pater says, while consumer matters on the telecoms front need to be addressed - "more and more as the industry matures in SA and greater emphasis is placed on consumer protection" - this is unlikely to be done within the near future.
Pater believes, however, that the issue will be addressed by the DOC sooner rather than later, but ICASA will probably first focus on allocating spectrum before it turns its attention to wholesale/retail separation and consumer transparency.
"As far as transparency is concerned, ICASA began approaching this topic a few years ago when it began investigating greater mobile account transparency in terms of itemising service fees versus handset fees (on postpaid contracts). The process was halted as ICASA focused on other issues."
He says decisive action by the DOC around the cost to communicate in SA would "certainly benefit the consumer" - depending on the ultimate outcome of such action.
"The large operators may not like this, as any measures (direct or indirect) that result in lower revenue for a product or service are not favourably looked upon. It would force operators to be more competitive on input costs - the lower the input costs, the greater flexibility an operator has to compete on retail price and/or retain higher profit margins.
"Operators will also move to greater bundling of products, offering a package value versus cost. Retail prices are not only based on input costs, but also on the value or perceived value by the user for the money spent, and if the users perceive value, they will be happy to pay the price."
Difficulties and priorities
Ovum analyst Richard Hurst says the challenges hanging over Pule and the DOC may stifle the possibility of any meaningful resolution on telecoms prices in the near future.
"The DOC has plenty on its plate right now and perhaps it may be better to concentrate on the issues such as the allocation of spectrum and the re-draft of the ICT policy document."
Hurst says broadband in SA is another facet that should be prioritised above telecoms consumer issues. "Indeed, while it is laudable that the focus is on the lowering of traffic and making communications more affordable, I think another key facet would be the increased penetration of the broadband services across SA."
Hurst adds that operators are likely to give strong resistance to directives originating from the DOC in terms of lowering prices. "Here we can expect a strong push back from the operators. The rationale for this is they are currently engaged in a price war with the ongoing battle to lower traffic and win markets from each other."
In time, he says, telecoms tariffs in SA will find a floor.
Hurst says the issue of making communications more affordable is ultimately part of the overall government policy, and making tariffs more transparent and easier to understand would be a considerable boon for consumers and enterprise alike.
However, he says, with the "current clouds" hanging over government's communications ministry, these moves will win neither faith nor favour in the eyes of the public and the sector.
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