Telkom and MTN have reached a deal which will soon see a general reduction in the cost of calls between Telkom and cellular calls.
The companies yesterday announced that MTN would forgo 4c per call on the fee it is entitled to when a call is made from a Telkom phone to an MTN phone. The reduction, which takes effect in February and cannot be withdrawn this year, will be passed on to Telkom customers.
The result is that Telkom customers will pay R1.84 for the first minute of a call to an MTN number during standard time, as opposed to the R1.88 for calls to Cell C or Vodacom numbers. After the first minute, calls to MTN will be charged at 92c per 30 seconds as opposed to 94c for the other cellular operators.
Although the reduction is small, amounting to little over 2%, and only affects Telkom to MTN calls, it bodes well for future reductions.
MTN corporate affairs group executive Yvonne Muthien says the deal was struck on the condition that the savings be passed to Telkom customers, which is expected to lead to an increase in calls between Telkom and MTN customers. But it is also a gesture.
"We hope it will be reciprocal and that Telkom will do the same," she says. "Negotiations are continuing."
Reciprocation from Telkom will see MTN customers pay less for calls to Telkom phones, again with the hope that traffic and revenue will increase as the profit margin on each call decreases.
The deal also puts pressure on Cell C, but especially on 50% Telkom-owned Vodacom, to reach similar agreements.
"Each operator engages in negotiations with Telkom independently," Muthien says, but admits that Vodacom will be hard pressed to explain to its customers why it would choose not to seek similar benefits for them.
Vodacom did not immediately respond to requests for comment.
If such reductions over time prove to increase traffic volumes and do not hit the respective companies` bottom lines, similar moves could be expected in future. The cumulative effect could prove substantial; much of the cost of a call is made up of the interconnect fees one operator pays to another.
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