SA MOBILE OPERATORS DEFEND HIGH PRICES AT COLLOQUIUM

Telecoms

Mobile operators are defending mobile pricing structures, contradicting the view of government, stakeholders, international experts and an appointed working group that concluded that the South African telecoms pricing structure was unreasonably high.

The debate on pricing structures heated up at the second telecommunications colloquium, held in Midrand this week. Responding to the working group's report, mobile operators said the group's outcomes were not based on proper evaluation mechanisms. They claim that the mobile pricing structure compares favourably to international counterparts.

Supporting the working group's findings in the debate was the International Telecommunications Union's strategic and policy unit head Tim Kelly. Using the digital opportunity index as a benchmark, he said, SA was performing the worst with regard to telecoms, compared to countries at a similar level of development. Mobile compared to fixed-line was performing better in SA, he conceded, but said that compared to other countries, mobile should be performing better.“SA's telecoms costs are exceptionally and unacceptably high. We have to put in place a series of effective strategies to reduce the costs and contribute to providing universal services to our people,” he said.

“There is a strong need to investigate the facts through proper mechanisms before concluding that prices are too high,” said Vanessa Van Zyl, Vodacom's executive head of special regulation, during a breakaway session at the colloquium.Market assessment is necessary to determine empirically whether the market is in fact over-priced. Furthermore, this assessment would provide the least intrusive remedy to specifically address this potential pricing problem, she explained.

“We need to assess first whether prices, specifically mobile prices, are an impediment to doing business in SA and achieving universal access,” said Van Zyl. MTN and Cell C echoed Van Zyl's stance when ITWeb caught-up with company representatives after the session.Conclusions that prices are too high should be based on accepted regulatory accounting as provided for by the chart of accounts and cost allocation manual framework for telecommunications accounting, said Karabo Motlana, head of regulatory affairs at Cell C.

It is not a matter of whether the prices are high or not, but what framework is in place to determine the cost of services and for the authority to introduce remedies, he said. “Any conclusions based on country comparisons, in the absence of such framework, would be regarded as subjective and contestable.“Pricing is a regulatory issue and therefore requires proper research to determine which market and in what instance it is excessive,” said Motlana.

MTN did not believe SA had the most expensive rates, as was suggested. “Mobile penetration at 24 million speaks for itself. MTN's new 3G data tariffs are among the lowest in the world; furthermore, MTN's off-peak SMS and GPRS tariffs are among the lowest in the world,” said Ashraff Paruk, GM of products and innovation at MTN SA.

“One needs to compare like with like, especially with regard to market penetration, population coverage and quality of service,” said Paruk.

http://www.itweb.co.za/sections/telecoms/2005/0510141030.asp?S=Cellular&A=CEL&O=FRGN