Vodacom and Cell C will implement the cut from February 2010 and MTN on 1 March, but all have agreed to introduce new, affordable retail products based on reduced rates from 1 December 2009.
The effect of the reduction will be to lower cellphone costs for consumers as long as the operators make good on their commitment to pass on the reductions to the retail level.
As MPs had initially demanded a halving of the peak rate to just 60c a minute, the new cut devised by operators sees them getting off relatively lightly.
The new peak rate of 89c includes a generous profit as industry players reckon the actual cost of linking a cross-network call is as little as 30c a minute.
The agreement by Vodacom, MTN and Cell C to reduce call termination rates was the result of Nyanda's personal intervention after negotiations led by the Independent Communications Authority of SA (Icasa) broke down. Parliament's communications portfolio committee also exerted pressure on operators, calling for a reduction in rates to 60c a minute from 1 November.
Nyanda told the National Assembly the off-peak rate would remain at 77c a minute and the blended rate would fall from R1,03c to 77c.
Political parties welcomed his announcement. Cellphone operators had undertaken to ensure the reduction in wholesale prices would feed through to retail level, Nyanda said. The African National Congress chairman of the communications committee, Ismail Vadi, said the minister achieved in four months what Icasa had failed to achieve in four years.
“For the first time in almost a decade there is today a tangible and positive reaction by industry to government's call for a reduction in telecommunication costs,” Vadi said. He urged Icasa to do its job in finalising a glide path for further reductions over the next few years.
Source: Business Day
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