Telkom has released a statement on the much publicised issue of new, lower mobile termination rates (MTRs), which were set to take effect next weekend but have been put on ice for a month after MTN opposed MTR regulations.
Telkom says recent moves to oppose new MTRs will delay reducing the cost of calls to the consumer, and are not in the public interest.
The Independent Communications Authority of SA (ICASA) introduced new interconnect fees (termination rates) at the end of January. Termination rates are the fees operators pay each other to carry calls on their networks.
According to ICASA's new regime, MTRs will drop from the current 40c to 20c (which the smaller players will pay Vodacom and MTN to carry calls on their networks), while Cell C and Telkom Mobile will be able to charge their larger counterparts 44c per call terminated on their networks.
A three-year glide path will see MTRs reach 40c for Cell C and Telkom Mobile, and 10c for the two dominant players in 2016.
Detrimental delay
Telkom says it is relieved the initial delay to the implementation of MTRs will not be as long as originally anticipated and will be implemented.
ICASA initially proposed a two-month delay to deal with the legal application, to which there are 31 respondents, but yesterday deemed one month sufficient. New MTR regulations are now set to take effect on 1 April.
"Any delay to this implementation is to the detriment of consumers, who have in the past benefitted from Telkom's commitment to pass through savings derived from previous regulatory interventions," says Telkom.
The company says previous termination rate interventions have stimulated the industry to become more competitive as "all players have moved to offer lower retail prices following these interventions".
Telkom has vowed to pass the benefit on to the consumer when the new inter-network rates kick in. Telkom Group CEO, Sipho Maseko, says: "Telkom always strives to carry through these savings to our customers. In the past four years, Telkom has passed on significant savings to customers as a direct result of the lowering of MTRs."
Introduced in July last year, Telkom's 29c per minute Sim Sonke product has been positioned as the lowest prepaid call rate.
Maseko says the one-month delay means Vodacom and MTN will continue to enjoy favourable termination rates at Telkom's expense, "especially if we consider that from 2001 to 2012 Telkom has subsidised these operators".
He claims the delay in ICASA being able to institute new MTRs has ultimately constrained the company's ability to offer even better retail prices to consumers.
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