The Independent Communications Authority of SA (ICASA) is focusing on the wrong end of the affordability issue, mobile operator MTN said at yesterday`s public hearings into mobile telecoms pricing.
The hearings are part of the regulator`s investigation to establish whether the high costs of mobile services are justifiable and if there is a need for more rigorous regulatory oversight of mobile tariffs.
Nkataka Nyoka, head of regulatory affairs of MTN, said the central choice ICASA faces is whether to lower usage prices for consumers who are already connected, or to use some of the funds generated by the current pricing model to connect disadvantaged people who do not have access to basic telecoms service.
"Global experience shows that these are exclusive choices, and the outcome of the enquiry may well lie in answering this central question," he noted.
"Low prices may hamper investment in network expansion because there is not enough money to roll-out networks and connect customers," Nyoka stated.
Defending prices
MTN`s written submission stated that usage prices are not too high and there is sufficient competition in the mobile telecoms space. Vodacom and Cell C were also firm in their view that mobile prices are not too high. Both providers also said research data did not substantiate claims that mobile prices are exorbitant.
Both operators suggested a study be undertaken to determine the nature of the problem in mobile telecoms and which basket of services was affected by the problem, before administering appropriate remedies. Regulation should be a last resort, they said.
ICASA councillor Tracy Cohen questioned whether the three operators had undertaken any research to determine if current prices are affordable to South Africans. She noted that Vodacom`s 2004 annual report stated that the average prepaid user spends R65 per month on phone usage costs. That is more than R2 a day, she said.
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