State seeks to set cellphone call prices

Thabo Mokone

THE Department of Communications and Telecommunications industry regulator Icasa (Independent Communications Authority of SA) wants the Electronic Communications Act to be amended to give government powers to set prices for cellphone calls.

In a move that is expected to be met with stiff resistance from the cellphone industry, Themba Phiri, deputy director-general in the department of communications told parliament ? which is conducting hearings into the high cost of telecommunications in South Africa ? that government was considering a flat rate regime for cellphone calls.

Phiri said cellphone call charges in South Africa remained very high when compared to other countries in the world, despite intervention by former communications minister Siphiwe Nyanda in 2010 to reduce the cost of making cellphone calls.

"The amendment to the [act] in addressing matters which hinders competition and other related matters needs to observed. The imposition of a flat rate on mobile voice calls in South Africa needs to be studied to determine its relevance in today's market. Regulation of transparency in the pricing and the publication of mobile retail prices is a very important policy issue," Phiri said.

Nyanda's intervention reduced the cellphone termination rate from R2.50 to 89 cents per minute in 2010 and this was expected to drop further in March next year to 40 cents a minute.

Cellphone termination rates are what mobile operators charge consumers to carry a call between different networks.

Cellphone companies are vehemently opposed to a reduction in termination rates, saying such a move would lead to massive job cuts as profits would plummet. But Icasa has disputed this claim by saying that cheaper cellphone call rates would attract more customers to the cellphone market.

Information and Communications technology expert Professor Alison Gillwald said: "The very high input cost of communications to this economy is killing certain sectors... Our wholesale [cellphone call] prices remain very high. They have come down but they remain very high."

Vodacom, Cell C and MTN are expected to make their submissions this morning.

Source: http://www.peherald.com/news/article/10434

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