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Article about vodacom rate n date:
The Portfolio Committee on Telecommunications and Postal Services met for a briefing by the Department of Telecommunications and Postal Services (DTPS), Independent Communications Authority of South Africa (ICASA), Vodacom, MTN, Cell C, Telkom and Neotel, on the cost of telecommunications in South Africa. MInutes of meetings of previous meetings were also adopted. Prior to the briefings, Members pointed out that they had not been kept updated, weekly, on the strike action at the South African Post Office (SAPO) despite the Minister's assurance that meetings would be held.


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The DTPS explained the mandate of this new Department, which included the creation of a vibrant ICT sector to ensure that South Africans had access to affordable and accessible ICT services. A benchmarking study had been done, that concluded that South Africa was expensive for fixed line access, that fixed line connectivity was declining, that South Africa had one of the most concentrated mobile markets, with relatively high mobile penetration but low usage because the wholesale fixed and mobile termination rates were also very expensive. The electronic communications market was evolving rapidly, with voice, data and audio services offered on traditional telecommunications networks. Data demand was growing faster, at above 60%. Market failures were being addressed through mobile termination rate-a-key regulatory instruments. In South Africa, the mobile market was dominated by four players, two of whom shared about 80% of the market. The fixed market had two operators, with Telkom having a vast network. ICASA viewed the Call Termination Regulations as a process to rebalancing market failure and to ensure cost-base transparent pricing. The call termination rates had declined, from R1.25 per minute in 2010 to R0.20 currently. The Department aimed to reduce prices, foster more competition, develop a national roaming policy and regulations to facilitate access to infrastructure and improve competition, and its policy aims were outlined. ICASA was mandated to .regulate electronic communications, broadcasting and postal sectors in the public interest, ensure affordable services of high quality for all South Africans and reduction in cost to communicate. In June 2013, ICASA developed a Cost to Communicate Programme, designed to address concerns regarding the cost to communicate and stimulate higher competition, with interventions at wholesale level. It conducted a review of the 2010 Call Termination Regulations, in terms of section 67(8) of the Electronic Communications Act, but was challenged in court by MTN, then Vodacom, who believed incorrect processes were followed, and the 2014 Call Termination Regulations were declared “unlawful and invalid” by the South Gauteng High Court, with the declaration of invalidity suspended for six months. ICASA had then adopted a robust consultative process to determine rates, met the court deadline and published revised and final regulations on 29 September 2014. These were cost-based, and the cost models and standards were explained. Cell C explained that it had the cheapest call rates, charging 0.66 per second for calls made to both its network and other networks at peak and off peak periods. Telkom mobile was charging 0.29 per second to its own network, but 0.75 to other networks, at both peak and off peak periods. MTN charged 0.29 per second to its network, and 0.79 to other networks at both peak and off peak periods. Vodacom charged the most, with charges of 1.20 per second for calls made to both its network and other networks at peak and off peak periods. The base tariff comparison for data bundles were also calculated and included in the presentation. The initiatives by Cell C to reduce the costs were described. Cell C believed that effective and sustainable competition was needed, and pointed out that the rates of other operators had been forced to decline in answer to Cell C's initiatives. The concept of an effective rate" was explained. Cell C was critical of the regulatory body, and said the process had been slow and unsatisfactory since 2012, and had failed to address the duopoly of MTN and Vodacom, and if the proposed mergers were approved, Cell C would remain the only challenger. Telkom said that it was committed to making communications affordable, and said it had consistently reduced call rates, particularly over the last five years. It had also simplified the National Tariff Structure by collapsing local and long distance rates into a single rate, dropping long distance rates. It offered over R400 million in tariff reductions to wholesale customers over the last two years, and cut prices to stimulate demand, which allowed telecommunications to peak in its contribution to GDP, without further government stimulus. Although nominally, revenue would grow, it was effectively declining when viewed against increased cost of living. Growth of broadband would be countered with lessened demand for voice. Telkom had therefore embarked on a major repositioning and cost saving exercise, and was looking at collaboration with other players, and augmenting its capacity to offer diverse services, with mergers and acquisitions. Telkom told the Committee that there was a need for proper alignment between national policy and regulatory philosophy, that sector policies and regulation should mirror national policies supporting development, defining the roles of SoCs in the economy needed to be defined in line with the developmental state agenda, and ICT infrastructure requirements reviewed through the Strategic Infrastructure Projects. Policies and regulation must be consistent and coherent and in line with the objectives of the ICASA business plans and time lines for SA Connect. Neotel's briefing noted the impact of current policies and the move to a cost-based model, and examined the short and longer term strategies to lower the cost to communicate. It believed that the 2010 - 2013 termination rate reductions supported greater competition in the market. These termination rates had assisted Neotel in reducing the cost to consumers and to gain some consumers. Neotel had been a front runner in lowering retail rates, and described what it had done. In the six months following the Court's ruling, it had been unable to act further, because of the regulatory uncertainty, but welcomed the new regime, noting that lower mobile termination rates were important for smaller operators.













Vodacom rate n date