Vodacom‚ MTN say they are lowering their prices

The two operators have faced harsh criticism for being resistant to passing price cuts in mobile termination rates on to consumers.

Termination rates are the fees operators pay each other for customers to make calls across networks. The rates have come down to 40c from a high of R1.25 three years ago.

Parliament's continuing public hearings on the cost to communicate in South Africa have further highlighted the public's frustration with the cellphone companies‚ with most presenters blaming the big operators for high costs.

Mobile operators have recently introduced data and voice specials as the price war in the industry gathers pace. However‚ it is precisely these specials that have drawn the ire of Parliament.

In 2012 Parliament's communications portfolio committee chairman‚ Sikhumbuzo Kholwane‚ criticised operators for offering specials instead of actually cutting the cost to communicate.

"Should South Africans wait for specials in order to make calls?" he said.

The cost to communicate in South Africa is among the highest in the world. The country has been ranked 117th out of 140 countries in terms of mobile tariffs.

During the first round of Parliament's public hearings on communications costs in 2012‚ the Department of Communications said Vodacom and MTN were the most resistant to passing price cuts in mobile termination rates on to consumers and were mainly responsible for high mobile voice prices in the country.

Vodacom spokesman Richard Boorman said on Monday that despite the criticism the company had faced‚ it has continued to bring down the cost of data and voice‚ in contrast with rising food and electricity prices.

"The industry is doing a lot for consumers despite the prevailing economic environment ... we want to spread access to data and voice‚" Boorman said.

He said Vodacom welcomed the public hearings on the cost to communicate as such debates were "healthy" for the industry.

MTN South Africa's chief corporate services officer‚ Robert Madzonga‚ said on Monday that the company ""remains committed to continually introducing retail solutions to its customers in the prepaid‚ postpaid and data categories that allow them to save costs‚ talk more for less‚ and access the internet for longer‚ faster‚ and more affordably".

"In fact‚ while many billions in wholesale revenue have been taken out of the industry‚ the changes in the business model that MTN has implemented have been in the context of a very competitive retail market‚" Madzonga said.

"One only has to open the newspapers and see the variety of promotions offered by MTN to realise that mobile rates have significantly declined in the past three years. At the same time‚ MTN has kept investing in its network to offer its mobile subscribers increased voice capacity and a world-class 3G network ... to carry the required data traffic that our customers require."

The portfolio committee on communications started its public hearings on the cost to communicate last week in Gauteng. On Tuesday‚ the committee was to be in the Eastern Cape and would then proceed to KwaZulu-Natal later this week.

Kholwane said on Monday that the hearings would not be limited to the call termination rates but would include the cost to communicate in the entire communications sector.

Source: Business Day via I-Net Bridge