Second national operator Neotel has dropped its peak rates to meet the reduction in mobile termination fees.
The company says it will drop its peak rate to R1.20 per minute to all operators, barring Cell C. “We have always said any reduction in interconnection rates must benefit the consumer and we are happy that even our competitors are beginning to echo this message,” says Neotel executive head of corporate communications Wandile Zote.
He says the reduction currently excludes the third mobile operator, because the company has not finalised its agreement with Cell C yet.
Neotel has been overlooked as a possible winner in the interconnection drops, since it was not as vocal in its opinion as other companies. However, like Telkom, the second national operator stands to gain from lower mobile payments, because much of its traffic will land on Vodacom, MTN or Cell C's networks.
Mobile termination rates were culled to 89c at the beginning of the month, followed by a decrease in prepaid rates offered by the mobile businesses. Telkom pre-empted the rate cut and earlier this year reduced its own rates.
Neotel has been slow to drop rates, although the company's stalling may well have been to avoid financial problems if the rates were not dropped. The mobile termination rate cut was almost halted by the Independent Communications Authority of SA when it declined to approve the agreements submitted by the operators in February.
However, just in time, the operators and the regulator thrashed out new agreements to see the cuts go ahead on the first of this month.
Neotel says the new rates also mean that for the first time, for most calls to mobile phones, it will be cheaper to call from a Neotel phone than from a mobile phone. The company is also preparing to migrate users off Telkom's network when geographic number portability gets under way in April.
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