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Making a phone call costs twice as much as the international average

By unknown | Nov 29, 2007 | COMMENTS [ 0 ]

Leseja Mokgata

Leseja Mokgata

Making a telephone call in South Africa costs twice as much as the international average, despite lower quality.

This was according to the International Price Comparison study on telecommunications, which compared telecoms prices in 15 countries. The study was carried out by Genesis Analytics and was released yesterday by Business Leadership South Africa,

Sarah Truen, senior associate at Genesis, said: "While there is evidence that price decreases have happened in South Africa since 2005, it is at a much slower rate than the international average."

SA was ranked against developed countries such as the US and Australia and developing countries, some of which have lower purchasing power, such as Thailand, Turkey and Brazil.

It measured the prices of nine product categories that are the core of the telecoms industry. South Africa fell behind heavily when it came to International leased lines where prices are 253percent higher than the average global price, Business mobile services (107 percent higher), Retail ADSL services (119 percent) and usiness ADSL (97 percent).

Local bandwidth costs 405 percent higher than the international average compared to 399 percent in 2005, Business Leadership said.

"We cannot hope to remain competitive in telecommunications if we continue to lag behind international trends. We need to increase competitiveness or implement more aggressive price regulation," Truen said.

The Independent Communication Authority of South Africa (Icasa) has implemented telecoms pricing regulation, however the shortage of resources at the authority and the complicated nature of the regulations makes it difficult to implement.

Mike Schussler, T-Sec chief economist, said: "The Department of Communications is destroying development in the telecommunications industry.

"Communications is one of the premium areas where South Africa is lagging, and something radical needs to be done immediately in decreasing prices."

Telkom own the onlysubmarine data cable (SAT3 cable) that connects the country to the rest of the world, forcing many companies to develop their own cables or route through neighbouring African countries.


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