ICASA to Review Telkom Charge Increases

[SOUTH AFRICA] The Independent Communications Authority of South Africa
(ICASA) said on Wednesday that it intends to review fees and charges in the Public
Switched Telecommunications Sector.

The move comes after the country’s national operator Telkom increased telephone
charges by the maximum amount allowed under the law (the same law that protects
Telkom’s monopoly until 2002). On average, as the corporation is eager to point out,
the increases amount to 5,4%, which is 1,5% lower than the projected Consumer
Inflation Index of 6,9%. Seems fair.

But what the company isn’t shouting about is that the brunt of this “average” increase
is being born by the public. In fact, the minimum call cost for local calls is up 16%, from
50 cents to 58 cents. But International calls are actually 2 cents cheaper (sliding to
R1,22/minute in standard time). Hence the seemingly beneficial “5,4%” increase.

ISDN rental for business customers will be cheaper on the bottom end of the scale
(ISDN2, from R196,49 to R175,23), while the top-end will be more expensive (ISDN 30,
from R2 270,88 to R.2 498,99).

The criticism leveled at Telkom is that it’s forcing the public to bear the cost of cheaper
phone calls for business. In response, Telkom says it needs to rebalance tariffs to
remove cross subsidy before competition becomes truly effective.

From an Internet point of view, the increases make it more expensive for consumers to
connect to the Internet from home, making us more reluctant to go online (except at
work), slowing the growth of the Internet in this country and hampering our efforts to
keep up with the rest of the wired world.

A deregulated telecommunications industry is seen as essential to Internet growth by
bodies like the United States Internet Council. Unfortunately, now we know why.

At least ICASA is beginning to act in a manner befitting its charter. Heavily criticized
for its handling of the 3rd Cellphone license and coming under fire for refusing to
allocate additional bandwidth to MTN and VodaCom, the body has recently aligned
itself with the South African Bureau of Standards (SABS) regarding telecommunication
standards and is openly criticizing the government for not having a comprehensive
and clear policy framework for the liberalization of the telecommunications industry.
Lets see how well they do with the Telkom price review.

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