Telkom new operator rates slammed

Johannesburg, 08 May 2007

Fixed-line operator Telkom has announced rates for calls that originate from its network and terminate on the networks of newly-licensed telecom providers. However, the Communications Users Association of SA (CUASA) has slammed the rates for being "complicated, unworkable and anti-competitive".

Telkom says the rates, which apply to Neotel and under serviced area licensees (USALs) and value added network service (Vans) operators, go into effect on 23 May, pending approval by the Independent Communications Authority of SA (ICASA).

Vans will be charged a minimum of 72c per second, including VAT, for all calls, irrespective of distance.

For USALs, calls to fixed destinations will carry a minimum charge of 72c (including VAT) for all calls, irrespective of when the call is made, with calls to mobile destinations charged in increments of one minute for the first minute and in increments of 30 seconds thereafter.

Calls from Telkom to Neotel customers will be charged at 65c (including VAT) per minute, irrespective of distance or time.


Steven Hayward, Telkom's managing executive for retail marketing, says Telkom welcomes competition in the telecommunications environment.

However, CUASA, a user advocacy organisation representing corporates, has criticised the rates for being too high and complicated, and for making it difficult for newly-licensed entities to compete.

"We cannot believe that Telkom has chosen to try make the matter of voice call rates even more complex than it is at present," says CUASA spokesman Ray Webber.

Webber says the average user will have difficulty working out what calls to the new networks will cost, he says. Additionally, users expect to at least pay the current Telkom rates to call numbers on other fixed networks within SA.

"This is a time when call charges should be decreasing, and decreasing significantly, not increasing," he says.

CUASA also questions why Telkom charges more for carrying half a call to another network than they currently charge for carrying both halves of calls on their own network, Webber says.

"What chance do Neotel, the USALs and Vans have to really get customers and compete with Telkom, if these proposed rates are approved?"

Webber says CUASA has called for ICASA not to approve the proposed call rates. The current philosophy of unreasonable and highly-inflated call charges for mobile calls should not be permitted by ICASA to permeate into new fixed networks.

"This has to be stopped now. If it isn't, we will again have the ridiculous situation we have with mobile call charges today, which was inherited from poorly-conceived allowances made to the initial two mobile networks operators some 13 years ago."

Business implications

The way the rates are structured will make Telephone Management System (TMS) programming extremely complex, says Webber.

Users, both private and business, want a single rate for calls to any and all fixed networks, preferably with standard/peak and callmore/off-peak rates.

Webber notes that Telkom currently charges a standard rate for all calls to each country, irrespective of which network in that country a call is actually terminated on. The same could and should apply in SA, he says.

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