Telkom, which last year chose to use its full allowable level of tariff adjustments (9.5%), has announced that its average 2004 increase will be 2.7%.
The new tariffs come into effect on the first of January, and are based on a formula set out by the Independent Communications Authority of SA.
This formula imposes a price cap on a basket of specified services, and overall tariffs for all services in the basket may not be increased by more than 1.5% below inflation, based on the Consumer Price Index (CPI) and measured using revenue for the services in the basket at constant volumes for the prior year.
While the inflation based on the year-on-year movement in CPI sits at 3.7% - effectively meaning that the monopoly`s increase should sit at 2.2% - the current regulation makes provision for the carry over of allowable rate benefits that were not used in the prior year to be claimable in the following year.
In the 2003 annual tariff increases, Telkom did not utilise the full allowable rate benefits, meaning that the organisation can carry over a further 0.5% allowable increase in tariffs.
"On the face of it, Telkom`s new tariffs appear to be reasonable, and it seems as though this is the first time the company has announced tariff increases that do not immediately get one`s back up," says Ray Webber, chairman of the Communications Users Association of SA.
"While we will still need to study the full details of the tariff hikes, on the surface it certainly appears to be good news for consumers."
While the tariffs have generally increased, with local call rates rising by 1.9%, and tariffs for data products up by 1%, long distance rates remain unchanged and international call rates to fixed lines will be reduced by 3% to 6%.
Fixed line calls to cellular phones have increased in off-peak times by 2c per minute for MTN and Cell C and by 6c per minute for Vodacom. Peak time charges are also up 8c per minute for Vodacom, although they have only been increased by 2c per minute for the other two providers.
"It is good to see that the increases in terms of cellular tariffs have been kept low, although it is very interesting to see that the increases for Vodacom calls are bigger than for the other providers, considering that Telkom are shareholders in Vodacom," says Webber.
"While I suppose it could be argued that Telkom`s tariffs really should have decreased, this is something that will occur once there is real and sustainable competition to the incumbent."
He believes that part of the reason for the low level of tariff increases has to do with the company attempting to improve its image ahead of the licensing of the second national operator.
"The increases as far as effects on the man in the street go are negligible, and I feel that for once we need to say well done to Telkom; this is certainly a step in the right direction."
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