Neotel in favour of reducing interconnect fees

Ajay_Pandey.jpgNeotel has come out in favour of government’s stance on reducing interconnect fees, saying it is a step in the right direction to bring down the cost of communications and make it more broadly available to South Africans.

“We have always supported increased competition in the telecommunications market,” says Ajay Pandey, MD and CEO of Neotel. “The only way to truly drive competition is to allow for easier market entry.”

Pandey does however make it clear that the reduction in interconnect fees must be visible to customers through tangible cost savings. “For too long South Africans have been held ransom by a lack of choice and have had to pay these exorbitant fees if they wanted to have access to communications,” he says. “The opportunity now is to pass this saving on to the consumer who traditionally could not afford communications.”

Pandey also believes it is critical that a clear, transparent process is followed. “As operators it is our responsibility to connect South Africans and we need to work in partnership with the authorities to achieve this goal,” he says. “We have never been afraid of competition – in fact as the innovative telecommunications challenger we thrive on it, but this change must be made responsibly.”

According to Pandey, a managed, process-driven reduction in interconnect rates is a step in the right direction towards bringing down the cost of communications, but there are other factors at play as well. “As the innovative telecommunications challenger, Neotel has always focused on making communications more affordable to South Africans – bringing high quality products and services to the market, providing real value,” he says. There are however a number of factors that impact on pricing. “Changes in licence fees, spectrum fees, acquiring Rights of Way in the process of building a network and associated environmental impact assessments all place additional costs on an operator seeking to challenge existing operations in the market,” says Pandey. “As Neotel, we believe these items should all be reviewed alongside the interconnect issues to ensure that the industry looks at all possible areas of cost-reduction, followed by a clear process to ensure that these savings are passed onto the consumer.”

“It is to be expected that there will be arguments for both sides of the case,” says Pandey. “As an industry, however, we must ensure that we do not get caught up in the fight and lose sight of the real issue at hand here – affordable telecommunications for South African citizens,” he concludes.