Cape Town – The Department of Communications told Parliament today that it hopes to bring down high cellphone call rates and broadband fees through a programme run in collaboration with Independent Communications Authority of South Africa (Icasa), aimed at stimulating public debate.
Briefing the National Council of Provinces’ (NCOP) select committee on labour and public services, the department’s Deputy Director-General of ICT Policy and Strategy Themba Phiri said the Cost to Communicate programme, launched last month, includes a study of the broadband value-chain, an ICT indicators portal, the review of the mobile termination rate and local-loop unbundling regulations.
The study of the broadband value-chain, which the department is currently conducting with Icasa, is aimed at developing interventions to lower the cost to communicate.
The ICT indicator portal, together with Icasa and Statistics SA, will hold statistics and information on communications providers, with ICT statistics collected twice a year and placed on the portal.
The portal and broadband value-chain survey are expected to be concluded by next year.
The department and Icasa are also together conducting a comprehensive market review of the impact of the call termination regulation, passed in 2010.
Between March 2010 and March this year, the cheapest pre-paid cellphone calls have fallen from R2.50 to 99c for Cell C (down 65%), R2.50 to R1.20 for MTN (down 60%) and R1.95 to R1.40 for Vodacom (down 28%).
But Phiri said a lot more can be done to reduce the mobile termination rate further, below 40c and argued that the current mobile termination rate of 40c is still far above that of the cost of an efficient operator.
The difficulty, he said, is that Icasa can’t enforce a tariff regime; however, the Electronic Communications and Transaction Act allows the regulator to intervene in lower wholesale prices.
He said the ICT market is characterised by high access and usage costs, low computer ownership and weak IT literacy.
While the fixed-line market is dominated by Telkom, which had about 90% of the market, the cellphone market is dominated by MTN and Vodacom which together had 91% of market share in the mobile market.
Despite this the SA telecommunications market grew from R7 billion in 1992 to over R100 billion in 2009, Phiri said.
Earlier this year, the former Minister Dina Pule issued a policy directive for cellular operators to make pricing more transparent.
Phiri said the action taken a number of years ago to allow for number portability isn’t working effectively because pricing isn’t sufficiently transparent to allow for customers to make an informed decision on whether to move to a new operator or not.
However, Christian Mahlanga, Icasa senior manager of markets and competition, pointed out that the reduction of cellphone call rates had led to people making more cellphone calls.
This had resulted in voice revenue having increased from R27 billion in the 2012 year till June 11, to R30 billion from June 12 to December 12, 2012, as more people were taking advantage of lower call rates.
The department also aims to issue a policy directive on premium television content to address rights of certain types of content sold on an exclusive basis, which allows the pay TV sector to leverage into the traditional voice and broadband markets by the bundling together of these services.
But MPs were not pleased, criticising the department and Icasa for the country’s continuing high cellphone rates and lack of clarity from the regulator on what it had achieved so far in lowering costs.
Phiri, however, pointed out that the Minister of Communications Yunus Carrim had met with Icasa recently on some of the challenges that face the regulator, including how the agency is funded and added that the department is working on legislative amendment to deal with this.
Phiri said that amendments to the Electronic Communications Act, currently before Parliament, aimed to address some of the pricing problems such as those with data services in the broadband market. – SAnews.gov.za
