Vodacom, MTN and Cell C will all soon have introduced reduced call rate prices.
However, World Wide Worx Strategy MD Steven Ambrose is sceptical as to whether these will mean real savings for consumers.
Earlier this week, Vodacom announced it would cut all peak hour on-net calls by 15% for prepaid and postpaid subscribers. In September, Cell C announced an effective 47% reduction to all its calls, across all networks, to a flat rate of 150c per minute.
MTN, which will announce details of its latest offerings this Sunday, has already introduced “dynamic tariffing”, which allows for lower cost calls on parts of its network that are not experiencing high traffic volumes.
In November, communications minister Siphiwe Nyanda said in Parliament that the Department of Communications had got the three major network operators to reduce their mobile termination rates from the first part of next year.
The interconnection rates have been a focus of public hearings held by the Parliamentary Portfolio Committee on Communications, after Independent Democrats leader Patricia de Lille suggested this was the root cause of the high cellular call costs in the country.
Christmas present
Nyanda's announcement said the mobile operators had agreed to reduce interconnection rates from 125c per minute to 89c during peak hours, while the off-peak rate would remain at 77c and the community service telephone rate would be at 6c per minute.
He also said cost savings for consumers would be achieved by the network operators introducing innovative products over the holiday period.
A Vodacom spokesman says the network operator's most recent cut had been planned and was not directly related to the minister's announcement.
“Every Christmas we have some kind of promotion and usually it is aimed at our prepaid customers. This year we decided to apply it to all our customers,” the spokesman says.
A Cell C spokesman says its announced cuts were made in anticipation of movement on the interconnection rate.
MTN says it will make a detailed announcement on its summer campaign this weekend and could not release details yet.
“It will mean cost reductions,” a spokesman notes.
RICA heat
However, Ambrose says the network operators have been hit hard by the implementation of the law that now requires all SIM cards be registered to users.
“Those have trimmed the subscriber numbers drastically and the network operators have had to do something. But they plan their promotions months in advance, and I am sorry to say, this latest round has nothing to do with the minister's announcement,” he notes.
After RICA was implemented in June, Cell C announced the Act had caused it to lower its subscriber numbers, but did not give any details. MTN admitted it lost up to 5% of its subscriber base, and Vodacom's growth slowed substantially.
“The timing of the price cuts and that of the interconnection hearings and the announcements seems to fit nicely; however, I would say that it is 99% related to RICA. Furthermore, December is the end of a financial quarter for the networks and they have to do something,” Ambrose explains.
These price reductions also all come with a number of terms and conditions that make it almost impossible to tell if there are any real reductions, he adds.
“During December, most of the calls are made during off-peak times and yet it seems that most of the reductions are for peak hours, so the networks really lose nothing. The only way to reduce prices is to foster competition.”
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RICA takes retail toll
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