Telkom warns it may keep rate cuts to itself | TechCentral

Outgoing Telkom CEO Reuben September has warned the group’s customers not to expect an automatic cut in fixed-to-mobile call charges that are directly in line with future reductions in wholesale mobile call termination rates.

In March, Telkom elected to pass on the entire 36c/minute saving when peak-time mobile termination rates were reduced from R1,25/minute to 89c/minute.

Mobile termination rates are the interconnection fees the cellphone operators charge each other and other telecoms companies to carry calls onto their networks.

Parliamentarians and government officials have lobbied hard for the rates to come down, in part because they’re seen as a barrier to new competitors emerging in the mobile industry.

Industry regulator, the Independent Communications Authority of SA (Icasa), wants the rates reduced to 65c/minute next month in both peak and off-peak periods. It wants further reductions to 50c/minute next year and to 40c/minute in 2012.

Icasa is set to hold hearings next week to consider submissions from the operators, some of which have argued for a longer “glide path” down to 40c.

Though Telkom passed on all the benefits of the initial and voluntary cut in mobile termination rates in March, September says there’s no guarantee the same will happen the next time the rates are cut.

“This matter requires further evaluation and we will make our position clear at the appropriate time,” he says.

However, Telkom may not have any choice in the matter. Communications minister Siphiwe Nyanda is keen to force down the cost of telecommunications and, given government’s nearly 40% shareholding in Telkom, there’s a fair chance the company will come under political pressure to pass on all the benefits to its customers.

— Duncan McLeod, TechCentral