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Hefty cost of running a business

By unknown | Apr 23, 2007 | COMMENTS [ 0 ]

Maryanne Maina

Maryanne Maina

The big four banks and Telkom often sponsor competitions for entrepreneurs to present themselves as helping to grow South Africa's vital small business sector. But when it comes to charging affordable fees to preserve a start-up operator's precious seed capital, a very different picture emerges.

The banks and the fixed-line phone monopoly often charge nearly double what they charge households for the same essential service.

Apply for a Telkom landline as a householder and the monthly rental fee is R99,92. Apply for that same line for a business and the monthly rental suddenly leaps to R132,75 - a 33percent increase.

The difference in Telkom's initial installation fee is more extreme. Households pay R189,99, and businesses get charged R342,30 - 80percent more.

Telkom claims to be working on the problem. Telkom's corporate communication group executive Lulu Letlape said: "Telkom consistently adjusts its pricing model to make telecommunications more affordable and accessible to businesses and South Africans. Price adjustments are filed with Icasa every year. Last year Telkom filed for an overall price reduction of 2,1percent, which was accepted by Icasa and became effective from August."

Bank charges also differ for businesses and households. For instance, Nedbank charges R500 to open a business account compared with R50 for an individual account.


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