Cape Town - Consumers will from early next year be charged 36 cents less when making cell phone calls, Communications Minister Siphiwe Nyanda announced on Thursday.
The minister said mobile operators had agreed to reduce their mobile termination rates to 89 cents during peak times and 77 cents during off-peak times.
South Africans are currently charged R1.25 per minute at peak times.
Addressing the National Assembly, Nyanda told Members of Parliament that Vodacom and Cell-C would cut their rates in February while MTN would do so on 1 March.
The cellphone operators have also committed to introducing new and affordable retail products based on the new rates from December.
The minister said the reduced fees were a step in the right direction. "This is putting money back in the pockets of ordinary South Africans, who need it more now than ever," Nyanda said.
He added that while it may seem only a small step, it was small step that will help South Africans.
"I have been assured that these developments will introduce more competition in the retail market. That, on its own, is the big early Christmas and Easter present that we can give to the nation."
The new tariffs would on be introduced next year because the network operators had said they needed time to allow for the adaptation of their systems. The systems and business models of a number of SMEs would also depend on the interconnection rate.
The minister said he would withdraw the ministerial directive that stated his ministry's intention to reduce the interconnection rate.
"We view the reduction of costs to communicate in a serious manner, not just on the wholesale but also the retail level. Further negotiations will be held with the network operators," Nyanda said.
He added that he would be presenting the interconnection rates to the Independent Communications Authority of South Africa (ICASA).
This is said to be among the higher than in countries like South Korea, Malaysia and India.