Telkom in phone-call rip-off

Making a call in SA costs twice as much as anywhere else in the world
Making a telephone call in South Africa costs twice as much as the international average.
This was the finding of a study by economics consulting firm Genesis Analytics, which compared the price of telecoms in 15 countries. The results of the study were released yesterday.
One of the main culprits is Telkom, currently the only landline operator.
The study was carried out by Regenesis Analytics and was released yesterday by Business Leadership South Africa.
Sarah Truen, a senior associate at Genesis Analytics, said: “There is evidence that price decreases have happened since 2005, [but] it is at a much slower rate than the international average.”
SA was ranked against developed countries such as the US and Australia and developing countries, such as Thailand, Turkey and Brazil. The study compared the prices of nine product categories that are at the heart of the telecoms industry.
The price of an international leased line in South Africa is 253percent higher than the average global price.
Business cellphone services cost 107percent more than the global average and retail ADSL services and business ADSL services are 119percent and 97percent more expensive respectively.
Truen said: “We cannot hope to remain competitive in telecommunications if we continue to lag behind international trends.
“We need to increase competitiveness or implement more aggressive price regulation,” she said.
The Independent Communication Authority of South Africa has implemented telecoms pricing regulation, but the complicated nature of the regulations makes them difficult to enforce.
To compound matters, the regulator does not have at its disposal the resources necessary to the enforcement of its regulations.
Mike Schussler, chief economist for T-Sec, said: “The department of communications is destroying development in the telecommunications industry and, in turn, the economic growth of the country.
“Something radical needs to be done to decrease prices.”
Telkom is currently the only owner of a sub-marine data cable that connects SA with the world.
The cost of bandwidth is 405percent higher than the international average.
The state-owned company’s exorbitant rates are forcing many major companies to route their data through neighbouring African countries.
Truen said a 12- step programme to decrease prices had been proposed in 2005, but had not been adequately implemented.
Among the steps proposed were that Telkom’s fixed-line infrastructure be unbundled; fair rate structures be introduced; Icasa’s independence and accountability be increased and cost-based prices be introduced.
Source: thetimes.co.za