Least-cost routing (LCR) company TeleMasters says lowering of interconnect fees offers exciting business opportunities.
Interconnect fees are set to start coming down next year, after communications minister Siphiwe Nyanda announced that the termination rate would start dropping in February.
The effect of changes to the interconnect fee between telecommunications operators is unknown, says TeleMasters. However, it says this “presents exciting business opportunities”.
“As changes in the market become known, our business offerings will be adapted in order to ensure the most effective communications solutions for our clients,” the company says.
TeleMasters, which is only focused on LCR, says any impact will depend on whether the drop in interconnect rates will affect the prices of the packages offered by the networks to LCR groups.
Recently, CEO Mario Pretorius said TeleMasters' solution to the drop in interconnect rates is to differentiate between customers who want higher savings, with a lower quality of service, and those who require perfect uptime and call quality.
Growth ahead
TeleMasters grew revenue 29.19% to R231 million in the year to September, and headline earnings by 9.69% to R14.4 million. Earnings per share improved from 33.35c to 34.29c, and headline earnings per share grew to 36.56c from 33.33c.
The group says “despite the continued general decline in the South African economy, our business operations have and are set to continue to grow”. It believes the telecommunications solution it offers will continue to add value to business operations in SA.
However, in the last quarter of the year, the company wrote off a large debt of a subsidiary of a listed financial company which stopped trading. This bad debt affected its earnings growth by 7%, which meant it only reported a 2.82% increase in earnings per share.
However, adding back the R905 829 impairment, headline earnings per share were higher, it says.
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