Cellphone rates to reduce next year

Friday, 13 November 2009
Cellphone rates will be reduced by 36 cents from early next year, Communications Minister Siphiwe Nyanda announced on Thursday.

SA Good NewsSpeaking in the National Assembly, he said the new agreed reduced mobile termination rates (MTR) by Cell C, Vodacom, and MTN would be 89 cents in peak times and 77 cents off peak.

Currently, subscribers paid R1.25 in peak times and 77 cents off peak.

The new rates would come into effect on February 1 for Vodacom and Cell C, and March 1 for MTN, Nyanda said.

This would allow the mobile operators and small, medium and micro enterprises to re-align their business operations accordingly.

"This... is putting money back in the pockets of ordinary South Africans who need it more now than ever," he said.

The MTR is the fee one network charges another for receiving calls on its network.

Nyanda said mobile operators had also committed to introduce new and affordable retail products based on the new rates from December 1.

High MTR's were impeding any possibility of new entrants to the market.

"I've been assured that these developments would further introduce more competition in the retail market," he said. The commitments received were within the operators' business imperative parameters and were voluntary.

Independent Democrats president Patricia de Lille said the announcement was "Parliament's Christmas gift to the nation".

"The ID welcomes these reductions as a start to reducing the interconnection rate to acceptable levels that curb some of the obscene profits made by cell phone operators until now," said De Lille.

She said this was an example of Parliament working for the people.

"Our success has translated into savings of billions of rand and will have an impact on the life of almost every single South African," she said.

Further consultations between the operators and the Independent Communications Authority of South Africa would still be constituted to conclude the interconnect agreements. Other communications costs would also still be investigated, Nyanda said.

Sapa

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