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Cell C calls for slashing of rates

By Brendan Boyle | Oct 15, 2009 | COMMENTS [ 0 ]

CELL C pulled the rug from under rival MTN yesterday, calling for the immediate reduction of the mobile interconnection rate to 75c for the two dominant players and to 65 cents for themselves.

MTN managing director Karel Pienaar had told Parliament's portfolio committee on communications that its proposal to slash the rate mobile operators charge each other to connect calls across networks would undermine Cell C's viability.

But Cell C's chief executive Lars Reichelt told the committee when his turn came to speak that the so-called mobile termination rate, now set at R1,25 during peak times, was too high and prejudiced poorer South Africans.

Reichelt conceded that his company was a net beneficiary of the interconnect billing system and would be pushed deeper into loss in the short term, but said a lower rate would remove an impediment to competition and help to drive call charges down.

"Lowering interconnect is the right thing to do. The interconnect rate is too high."

While Vodacom and MTN had given the committee written summaries of their views in advance, Cell C kept its plan under wraps until Reichelt spoke.


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