Cape Town, 06 Sep 2006
Neotel, the newly-operational second national operator, will tackle Telkom on the pricing of the international full circuit and the transparency of its end-user contracts, says MD Ajay Pandey.
"One doesn`t have to be a genius to work that out. Telkom`s pricing on the return leg of the international circuit is far too high," he says.
Pandey was speaking on the sidelines of the TelecomsWorld Africa conference in Cape Town.
According to Pandey, the SAT-3 undersea cable, which stretches from Cape Town up Africa`s west coast to Europe, is responsible for SA having such high international telecommunications costs.
"The leg from SA to London is priced at a certain level and that is an agreement Telkom has because of its exclusivity rights. However, if the London to SA circuit is priced at 'x`, then Telkom charges five times that for the half circuit from SA to London," he explains.
Last year VSNL, Neotel`s principle foreign investor, completed the acquisition of Teleglobe International, resulting in it owning 33% of the SAT-3 cable, a shareholding that is slightly higher than Telkom`s.
Pandey says once Telkom`s exclusivity ends over the SAT-3 landing rights towards the end of April next year, Neotel will negotiate to have at least equal access to the cable.
A Neotel official separately said that once the new telecommunications utility has access to the SAT-3 cable, it would be able to slash the price of voice calls dramatically.
"VSNL would be able to do this because it buys about 20 billion voice minutes a year on the international markets and so our pricing ability is far greater than Telkom`s," he said.
Pandey also says he wants far more transparency in the contracts Neotel will sign with end-users.
"I have told my staff that I don`t want to see any correspondence leaving our offices with an asterisk that indicates that 'conditions apply`."
Pandey also dislikes long-term lock-in contracts and says he wants to offer the customer flexibility through offering managed solutions rather than products.
Share