SA's second national operator (SNO), Neotel, has responded to the Competition Commission's criticism of the lack of competition in the local telecommunications sector.
Neotel's executive head of corporate communication and branding, Wandile Zote, says: “We are in full agreement with the competition commission that competition in the sector is certainly not where it should be.”
However, Neotel also says that, as the SNO, it is the “bastion of competition” in the sector. “We at Neotel have always been very outspoken about the need for a competitive market to benefit the South African public.”
The commission's annual report says the industry is rife with anti-competitive practices, evident through the 11 complaints it is currently reviewing relating to telecoms. While it did not disclose the figures, the competition authority says it devotes “considerable resources” to resolving issues in the sector.
The report fingers Telkom and Neotel (the national fixed-line operators) as primary culprits. The SNO has made it clear it will not compete with Telkom on pricing, and this, the Competition Commission says, creates a duopoly.
However, Neotel says it is already competing on a price level, with a tariff difference of between 20% and 30%. “Our investment in the international cables clearly demonstrates our commitment to bringing down the cost of international bandwidth for South Africans.”
The SNO says it has also positioned itself to compete in the provision of “value” to the country's client base. “In the past, South African customers have had to adjust their needs so they fit into what is being offered in the market. What we are trying to educate the market about is that they have the ability to ask for and get flexible and scalable products that meet their needs,” says Zote.
Last week, Telkom said it is committed to the process of consistently adjusting its pricing model in order to make telecoms more affordable and accessible to business, as well as the broader South African public.
“To this end, price adjustments are filed with ICASA on an annual basis,” it notes. “Telkom's price adjustments are effected in compliance with the price control formula implemented by ICASA. The aim of the formula is to limit the extent of the price adjustments using the formula: Consumer Price Index minus 3.5% plus carry-over.”
Earlier this year, when Telkom applied for its increase from ICASA, Neotel did not do the same.
Related stories:
Zero competition in local telecoms
Neotel quietly signs big deals
SA needs more fixed-line operators
Infraco Bill passed
Share
