Vodacom says sharp drop in charges would disrupt economy
SA state: mobile fee cuts not political interference
Govt says had to act as regulator failed to cut prices
October 13, 2009
The South African government said on Tuesday that its actions to try to reduce mobile phone charges are not political interference but are an attempt to deal with the communications regulator failure to cut prices.
The parliamentary communications committee is holding public hearings on Tuesday and Wednesday to hear reaction to its proposal to push mobile and fixed line phone operators to reduce interconnection fees, in an attempt to lower telecom costs that have choked the country's growth.
The committee Chairman Ismail Vadi said the government made the decision to step due to the regulator's failure to deal with the high rates.
"Foreign investors are saying there is no certainty anymore in the market, and are we going to see more of this kind of so-called political interference... We see this really as an extraordinary step," Vadi said.
"Under normal circumstances, I don't think it is the business of parliament to enter this particular terrain, but these are extraordinary circumstances and we, as the committee, have come to the conclusion that regulatory authority has failed over the last three to four years in dealing with this matter."
The communications committee has proposed that interconnection rates between telecom operators to be cut to 60 cents per minute during peak times by November and further slashed by 15 cents annually until 2012.
Currently, telecom operators charge each other R1.25 per minute during peak times to transmit calls via each other's networks.
The committee said last month that the high costs of mobile and fixed line telecoms has had an adverse impact on the South African economy and has hurt its citizens, particularly the poor and the marginalized.
Vodacom, South Africa's biggest mobile phone operator, said in its submission to the committee that it was against the government's proposal.
"A dramatic reduction of charges is likely to have a negative impact on government policy objective of universal access and would be disruptive to the economy and communications industry," Vodacom said.
Vodacom interconnection revenue, which includes income from Cell C, South Africa's No.3 mobile phone operator, for national roaming services, rose by 8.6 percent to R8.63 billion for the year to the end of arch.
MTN, South Africa's second largest mobile operator and Africa's biggest, raised its interconnection revenue to R6.9 billion in the year to December compared to R6.3 billion in 2007. - Reuters
|
|
