SA phone charges 'hamper growth'

This hinders business development and internet growth, analysts say.

Monopoly landline operator Telkom says South Africa's rates are competitive. A second telecommunications company was granted a licence late last year.

The survey by NUS Consulting compared call costs between 14 countries, including Australia, the UK, the US, Germany and South Africa.

Applauded

"Our tariffs for national long-distance calls and cellphones are still the highest of the major world economies with which we do business," Stephen Dolk of NUS Consulting told Business Day newspaper.

PHONE COSTS
3 min national call

• $0.08 in Sweden
• $0.34 in South Africa

• $0.16 in US
• $0.74 in South Africa

Only in Belgium were national local calls more expensive than in South Africa, and only in the United States were international calls costlier, the survey found.

South Africa's second telecommunications operator has not yet started to offer services, after receiving its licence in December.

Telkom should be applauded for lowering its costs despite the current lack of competition, Mr Dolk said.

"However, the decreases do not match up to the widespread price reductions made by telecommunications operators in many other countries, where charges for many call categories have dropped sharply as a result of competition," Mr Dolk said.

'Competitive'

A Telkom official quoted by the independent South African website My Broadband said research by an international pricing research body, Tarifica, demonstrated Telkom's call rates were competitive and affordable.

"Tarifica's latest research shows that Telkom's call charges are internationally competitive, and that there is no substance to NUS Consulting's contention that Telkom's call charges are hampering the competitiveness of South African organisations," Pinky Moholi, Telkom's chief sales and marketing officer, said.

She pointed out that NUS Consulting had surveyed South Africa along with 13 more developed countries, while Tarifica's information was based 26 countries including emerging market nations such as Argentina, Poland, Mexico and Hungary.

Neither survey looked at costs in other African countries.

Telkom's call charges were a strategy to subsidise the cost of the network, and a competitor would find it hard to offer cheaper prices, spokeswoman Lulu Letlape told Business Day newspaper.

RELATED INTERNET LINKS:
Communications Research Network
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My ADSL
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