Storm hopes for rate cuts

By Damaria Senne for storm

Johannesburg, 04 Nov 2005

Storm's rate will drop by 20% to 30% by next year and by 50% to 60% in the next three years - if the activities aimed at liberalising the telecoms market speed up dramatically, predicts Storm Telecoms' joint-CEO Tim Parsonson.

He was addressing businesspeople, mainly from the contact centre industry, in Johannesburg this morning. Although he is hopeful about the potential to lower the price of telecoms, Parsonson says there are still many areas that need attention.

The structure of the Electronic Communications Act (formerly the Convergence Bill), where infrastructure, services, applications and content are dealt with separately, is good as this meets market needs, he said.

However, there is a lack of clarity on what each level can do. He contends that such a lack creates a grey area where Telkom benefits and the Independent Communications Authority of SA (ICASA) is forced to waste time and resources "putting out fires".

There should be a clear separation on policy-making and regulation, but the ICASA amendment Bill centralises power to communications minister Ivy Matsepe-Casaburri, said Parsonson.

This is clearly not the right thing to do, he said, as the government already has a conflict of interests with its Telkom shareholding. There should also be a clear separation of business units within Telkom, so clients are not forced to cross-subsidise when they purchase services, he added.