Cellphone call charges ease as price war bites

Termination rates fall and packages more competitive, but the fee paid for a minute is a moving target

EDUCTIONS in the cellphone call termination rate and a “price war” among operators are bringing call charges down dramatically, MPs have been told.

Vodacom’s effective price for a minute dropped from 64c to 46c for prepaid and from 91c to 68c in its blended rate in the 12 months from June last year.

MTN’s voice tariffs dropped by 68 percent in six years and its data rates by 87 percent over five years. Cell C’s lowest pre-

Rpaid peak rate for calls to another network fell from R2.85 in 2009 to 66c this year, according to the presentations.

The figures highlighted the difficulty consumers face in choosing a service provider and package.

It is almost impossible to tell what you will be paying for each minute for any given call because it is determined by the time of day, whether you are calling a number on the same network, and, if you have a con- tract, whether you have used all the call time allocated for the month.

Complicating the picture are the many promotions on offer, and which apply only under specific circumstances.

In response, the Department of Telecommunications and Postal Services was working on a policy on transparent pricing, its deputy director-general, Themba Phiri, said at a hearing at Parliament yesterday.

A presentation by the regu- lator, Icasa, showed that the revised call termination rate – the wholesale price operators charge each other for terminating calls from outside their networks – had moved South Africa up the rankings for this cost in Africa.

A rate of 20c came into effect on October 1. This will fall to 15c in September and 13c the following year.

Icasa also showed that while the retail tariff – the price paid by customers – had not tracked the falling call termination rate exactly, there had been a similar rate of reduction.

Icasa councillor Nomvuyiso Batyi said the structure of packages made it hard to compare like with like.

MTN’s chief financial officer, Philisiwe Sibiya, said concerns that prices were high in comparison with those in similar countries were “unfounded” and the price war had delivered cheaper tariffs.

Cell C chief executive Jose dos Santos said the effective rates quoted by MTN and Vodacom were meaningless.

While the effective rate was the price that the average of all customers would pay for a minute when all discounts and promotions were factored in, the rate an individual would pay depended on usage behaviour.

Dos Santos suggested that service providers be required to submit an affidavit giving audited figures of how many of their customers paid the rates they quoted.

Representatives of all the companies called for the release of the broadband spectrum associated with digital migration to be finalised as soon as possible.

This would allow them to improve the quality and reach of their data services at a lower cost because it would limit the need to build more infrastructure while increasing available bandwidth.

They also complained about regulatory uncertainty in the sector and slow progress in finalising policy, along with the difficulty of getting permission from local authorities to lay new cables and the high rentals charged for cellphone masts.

Neotel regulatory specialist Peter Zimri said some malls levied charges that put them out of reach, while many private landowners entered into exclusive contracts with the big service providers.