MTN, Vodacom say costs are coming down

The two operators have faced harsh criticism for not cutting the mobile termination rates that operators pay each other for customers to make calls across other 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 Vodacom and MTN for the high costs.

South African mobile network operators have introduced large data and voice specials as part of a price war within the telecommunications sector and it is 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 of telecommunications. "Should South Africans wait for specials in order to make calls?" he asked at the time.

Expensive in world terms

Mobile phone costs and data charges in South Africa are among the highest in the world with the country being 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 (29 July) that despite the criticism the company had faced‚ it has continued to bring down the cost of data and voice calls‚ in contrast with rising food and electricity prices.

"The telecommunications sector 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: "MTN emains committed to introducing retail solutions for its customers in the prepaid‚ contract and data categories that allow them to save costs‚ talk more for less and have access to the Internet for longer and faster‚ at more affordable prices."

"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 (30 July)‚ the committee was in the Eastern Cape and it would then go to KwaZulu-Natal.