MILLIONS of poor South African citizens are crying foul over mobile phone tariffs. The government earlier this year directed all mobile cellular companies operating in the country to lower their interconnect charges, but citizens are still waiting to feel the effects.
The directive was made to mobile companies such as MTN, Vodacom, Cell C and other players in the industry with a view to cushion the poor from the exorbitant charges.
But Vodacom’s Group Head of Corporate Communications, Richard Boorman, told our reporters in a question and answer session that the general public needs to make a distinction between interconnect fees and tariffs.
“It is important to understand that interconnect fees are not the same as tariffs.
“Interconnect fees, also known as termination rates, are something that telecommunications companies pay each other to connect a call on their network.
“Tariffs are the amount that consumer pays to make calls,” explained Boorman.
He said South Africa’s largest mobile operator, Vodacom had voluntarily reduced peak mobile termination rates by 28.8% in 1 March 2010.
“We have also introduced a whole range of more affordable tariffs and promotions, resulting in a 7.7% reduction in our average effective price per minute in 2010.
He also pointed out that the 10% reduction in peak mobile termination rates would result in an R200 million reduction in annual pre-tax profits.
“This means that we have to work even harder to reduce our costs in order to be able to offer better value to our customers,” said Boorman.
The continued competitive and regulatory pressures in South Africa are likely to limit revenue growth in the medium term.
By GOODMAN MAJOLA
