Cellphone operators under fire over rates

THE big cellphone operators will continue to make a killing, even if cellphone call costs are slashed to 60 cents a minute, Parliament was told yesterday.

THE big cellphone operators will continue to make a killing, even if cellphone call costs are slashed to 60 cents a minute, Parliament was told yesterday.

Decision sciences professor Petrus Potgieter told Parliament's public hearings on the high interconnection fees charged by cellphone operators that in India cellphone calls cost 15 cents a minute.

He said in South Africa the actual cost of making a call from a cellphone was between 20 and 30 cents a minute.

But cellphone calls cost 1000 percent more in South Africa than they do in India, partly because MTN, Vodacom, Cell C and Virgin Mobile charge high "interconnection fees" to connect calls between different cell operators, and to connect calls from Telkom to cell numbers.

Potgieter said that in Hong Kong there were no interconnection rates. "Fixing a high minimum price for cellphone calls does not allow free competition with regard to price," he said.

Telkom has called on Communications Minister Siphiwe Nyanda to order cellphone operators to slash the interconnection fees between Telkom and cellphones from R1,25 a minute down to six cents a minute.

If this was done, Telkom would immediately slash the cost of calls to cellphones from the country's 125000 payphones by R1,19 a minute, said Telkom managing director Pinky Moholi.

However, Vodacom chief executive officer Pieter Uys justified the high interconnection fees, saying they offset the high cost of setting up cellphone base stations in rural areas.

Uys said Vodacom was investing in undersea cables that would drive down the costs of calls by 2011.

He said Vodacom had also brought the cost of an SMS down to 20 cents and that cellphone operators offered many "specials".

But DA MP Lindiwe Mazibuko said Vodacom should not claim to be doing the poor a favour.

"The reality is they are not making any calls because your tariffs are so high. You are trying to make a case for high interconnection fees based on the very people you are abusing," said Mazibuko.

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