Neotel calls for interconnect regulations

Johannesburg, 04 Sept 2009

Neotel has called for the lowering of interconnection costs, saying rates need to be brought down to a level that is fair to all operators and consumers.

Speaking at the 2009 Southern Africa Telecommunication Networks and Applications Conference (Satnac), in Swaziland, this week, Neotel CTO Angus Hay said more had to be done to lower telecommunications costs.

“Lowering interconnect fees is in the interest of the customer and we need to do it. Before it gets to a point where everyone starts bypassing regulations, we need to bring the costs down to a level that is fair for everyone.”

Hay added that, while interconnection fees are necessary to recover the cost of carrying incoming traffic on the network, smaller operators had been at a disadvantage for some time.

“While it's true that the dominant players can control their pricing, it's not ideal for all players,” he said.

Independent Democrats leader Patricia de Lille recently lodged a complaint with the Competition Commission over the high cost of mobile phone calls. De Lille called on the commission to investigate if dominant players are acting anti-competitively, or are guilty of prohibited practices.

Hay noted that reductions in the price of voice calls would only be realised with the regulation of interconnection rates.

“In the voice environment, the paradigms which currently exist prevent the lowering of the cost of voice.”

Addressing access

Hay added that access and high costs where the biggest challenges facing the local market. According to him, over time the differentiation will not be bandwidth, but access.

"Connectivity and getting people connected to the bandwidth is the issue. The real challenge is not just whether or not there is enough bandwidth, but whether or not we connect to it."

He added that, while converged services had been rolled out to millions already, the lack of infrastructure in certain areas was hindering further access.

“It's true that we are building infrastructure, but the question should be: do we have enough access through our existing lines? The challenge is cost. Rural coverage also presents us with complex challenges and we need to find creative solutions.”

Hay also called on government to find appropriate ways to fund infrastructure development through incentives, to ensure converged services reach all areas of the country.