Vodacom counters Cell C rates

Vodacom's new international tariffs challenge Cell C's 99c call rate, but are part of a promotion rather than a permanent price set.

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Vodacom has officially launched international call rates that undercut Cell C's signature 99c tariff by 10c.

This makes it the lowest rate in SA for calling overseas - but only to 52 destinations, for less than three months, and for a small fee.

SA's first mobile operator yesterday announced the induction of its 89c promotion that came to light at the end of September when a source revealed the operator's imminent plans to trim international tariffs. This followed a pioneer move by Cell C, which in August saw calls to 177 countries cut to 99c per minute on per second billing.

Vodacom's newly introduced rates - also on per second billing - can currently be positioned as the "lowest rate in SA when making international calls directly from a cellphone". However, the reduced rates are on a promotion basis and will only apply until the end of the year.

According to Vodacom: "Contract, Top Up and Prepaid customers will only pay 89c per minute anytime when making calls to 52 international destinations. This promotion will be available from 21 October to 31 December 2012."

The reduced rates are offered as an opt-in service, and accompanied with a monthly R5 fee payable by customers who choose to make use of it by dialling *111#.

In August, when Cell C upped the ante, reducing call rates to 177 countries (in addition to the 50 countries already on its 99c per minute call rate) CEO Alan Knott-Craig said the progressive moves towards cheaper calls across the globe were thanks to termination rate negotiations with international partners.

Knott-Craig notes that termination rates - those charged by other operators to carry calls on their networks - are the highest input cost when determining call rates in SA. Internationally, on the other hand, local networks are able to offer lower rates - and still keep reasonable margins - by negotiating better termination rates with international partners that have the ability to be flexible.

The interconnect fee for terminating calls between local networks - currently 56c - is due to drop to 40c next year March, as per the Independent Communications Authority of SA's (ICASA's) 2010 commitment to bring costs down on a sliding-scale basis.

The gradual decrease in local termination rates is expected to reduce local costs too, according to ICASA, which recently said prepaid mobile voice calls had dropped 24% in a two-year period, thanks to interconnect reductions.

Vodacom's international calling promotion is available for calls made to the following 52 countries: