Interconnect rate cuts benefits evident - Cell C

This follows a survey conducted by Du Pont Telecoms, a voice-based telecommunications solutions company, which found that the average business person could expect to save only 2% on their cellphone bill following the almost 29% reduction in cellular interconnect charges in March.

It said that a cut on mobile interconnect rates had not passed on the benefits of the decreased Interconnect rate to customers.

Du Pont Telecoms also claimed that Cell C had not announced any reduction in the per-minute rate for contract subscribers since the lower interconnect rate came into effect.

However, Reichelt said that the assertion that Cell C had not passed on the benefits of the decreased Interconnect rate to customers was "simply not true!"

"Cell C has in fact reduced its prepaid, top-up and postpaid rates since the Interconnect rate was cut in March 2010.

"Cell C was the first operator to introduce lower prepaid tariffs in November 2009. This was done in anticipation of the voluntary interconnection reduction. Cell C introduced a flat rate of R1.50 per minute to prepaid subscribers.

"In April this year, we also reduced our postpaid rates and contract customers now too benefit from a R1.50 flat rate. This reduction represents a cut of over 40% in our peak call rates," he said.

Reichelt said that of equal significance was the fact that Cell C had been the first to introduce flat tariffs. "The flat rate applies regardless of which network the call is made to and when the call is made - an industry first!

"We believe that customers should be able to make calls when they want, and to whom they want, at the same rate," the chief executive said.

Mobile operators implemented the first rate cut in March.

The Independent Communications Authority of SA (Icasa) then surprised mobile operators recently by cutting mobile interconnect rates further.

Icasa proposed a three-year glide-path for both mobile and fixed service licensees.

Mobile interconnect rates, currently set at R0.89 per minute, were proposed to be reduced to R0.65 from July 2010 and further reduced to R0.40 from July 2012.

Fixed termination rates were initially asked to reduced to R0.15 from July 2010, and further reduced to R0.10 from July 2010.