Telkom has reduced its retail rate for calls from its lines to independent telecoms operator Switch Telecom’s network by 18% from R1,07 (including VAT) per minute to R0,88 (including VAT) per minute after Switch agreed to decrease its wholesale call termination rate to Telkom and other operators.
Telkom’s customers will pay now R0,88 including VAT per minute to Switch Telecom lines, 18% less from R1,07 including VAT per minute.
Switch Telecom customers pay R0,43 including VAT to call to a Telkom line.
Gregory Massel, MD of Switch Telecom, said that the termination rate reduction means significant call costs for both the network’s subscribers and other parties calling Switch Telecom.
“The decreased termination rate, combined with Telkom’s decreased rate to connect to our network, would have a knock-on effect on our customers’ customers, as it would be significantly cheaper to contact them,” he said.
Switch Telecom’s reduction rates are part of the company’s strategy to align its termination charges closer to the cost price and promote the need for lower interconnection fees.
The Independent Communications Authority of South Africa (ICASA) is currently planning to regulate interconnection rates in terms of chapter 10 of the Electronic Communications Act.
“The reduction of termination rates charged by MTN, Vodacom and Cell C is long overdue, and the high cost of telecommunications has long been identified as a major contributor to the high cost of doing business in South Africa.
The move to reduce termination rates further will have an impact South Africa’s economic landscape. Already, Switch Telecom has committed to reducing its own retail rates for calls dialed to mobile networks as soon as the reduced mobile termination rates come into effect”, concluded Massel.