Telkom filed its 2008 tariff adjustment with the Independent Communications Authority of SA (ICASA) today, applying for an overall increase of 2.4%.
"Pricing is a key element of the value proposition and our pricing strategy is aimed at improving our competitiveness in areas where competition is expected to intensify and where arbitrage opportunities exist," says Godfrey Ntoele, Telkom's group executive of national sales and marketing operations.
Pending ICASA approval, the tariff filing will become effective on 1 August 2008.
The Price Control Formula, implemented by ICASA to limit the extent of price adjustments, uses the formula "Consumer Price Index (CPI), minus 3.5%, plus carry-over". At the time of Telkom's rate review, CPI was 11.1%.
According to Ntoele, under that regulatory formula, Telkom would have been allowed to file an overall increase of 17.2%. "Compared to the CPI used in the tariff filing, customers will experience a decrease in real terms of 8.7%."
The minimum charge for post-paid local calls, from zero to 50km, will increase by 9.4%, while the per-second tariff for local calls during standard time will increase by 3.1% and during Callmore time by 9.2%.
Customers using SupremeCall and Telkom Closer calling plans, with pure-per-second bundled offers, will not be affected by the tariff filing. International calls will see a comparatively low overall adjustment of 0.2%. "Within the SMME sector, SupremeCall customers are to save up to 25% with pure-per-second billing on all call types for an upfront monthly rand value," says Ntoele.
Even though all residential and business installation charges, as well as analogue and ISDN Basic Rate rental will increase by 11%, customers subscribing to ISDN Primary Rate will not be affected by the proposed increases.
Ntoele says Telkom's stated objective of growing the data business has resulted in the company filing an average decrease of 7% on data products in the basket. "Our broadband customers will also be pleased to hear that our submission makes provision for the monthly subscription charges for ADSL, Do Broadband and Telkom Internet to remain unchanged," says Ntoele.
"As in the past, we have complied with regulatory stipulations and we are optimistic that ICASA will approve the proposed tariff changes," he concludes.
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