Mobile operators must end “phoney price wars”, deliver free calls says R2K

Campaign group Right2Know (R2K) is warning mobile phone users not to be taken in by “profiteering” phone companies which promote their services with low-cost call rates that aren’t permanent, while at the same time warning that changes to the model for Mobile Interconnect Rates (MTRs) may end up costing consumers more.

R2K’s comments were made in a response to an announcement on Monday that the independent regulator, ICASA, has formally adopted the “Long-Run Incremental Cost +” (LRIC+) model for determining MTR costs, which is the amount mobile companies may charge each other to connect calls to different networks. In April, ICASA introduced new MTR regulations which saw smaller operators – Cell C and Telkom – paying lower MTR rates than the big two networks, MTN and Vodacom.

After a series of court battles, ICASA was told to revise its plans by the end of August. The new MTR rates ICASA will present have not been revealed yet, but they will be calculated according to LRIC+. A full description of the technical differences between LRIC (the previous model used by ICASA) and LRIC+ is available on the ICASA website.

Countries like the UK are already using LRIC+ for asymmetric MTR pricing.

The key difference is that LRIC+ will likely be more expensive as it more costs to the operators themselves into account, and that R2K objects to.

“R2K has noted concerns that Icasa’s modified model allows MTN, Vodacom, Cell C and Telkom to include costs that are not directly related to the interconnect fees, which will inflate the actual cost of communication and perpetuate profiteering through termination rates,” the group said in a press statement.

Since April, all the network operators have launched lower priced packages from 68 cents a minute upwards which can be ascribed to lower MTR payments – and it’s this that R2K takes objection to.

“Since the court’s ruling, MTN, Vodacom Telkom and Cell C have been engaged in an advertising war promising lower call rates,” it says, “These new rates have largely been used as a marketing tactic to attract new customers and are not necessarily permanent.”

Last year, R2K organised a campaign called “Right to communicate/Vula ‘ma Connexion” which saw protesters march on ICASA’s offices demanding operators offer basic services – including voice calls – for free. According to R2K, the right to communicate is enshrined in law under the Bill of Rights, and in the modern age this should include basic telephone services.

“SA has the 6th highest mobile phone charges in the world,” it said in its campaign manifesto, “Profiteering by the cellphone companies makes communication expensive for the majority of people.”

“We reiterate our call for free basic telecommunications services,” R2K said today, “The new interconnect fees must put an end to the phoney price wars and cut the cost to users meaningfully.”


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