Hope springs eternal

A new research study that found SA has among the most expensive prepaid mobile tariffs in Africa has not so much opened the eyes of the consumer as it has old wounds.

It is official: SA has horribly exorbitant telecoms prices. It's also nothing new: we've always known that. Our country's consumers have long bemoaned the high cost of telecoms across the board, while enviously ogling our comparatively economical international counterparts' rates.

But, like most inalienable realities, the passing of time allows us to become inured to certain standards, and eventually we just accept our fate and get on with life. Then, from time to time, hope springs eternal with the passing of a new regulation, the deregulation of a prohibiting law, or even new entrants onto the playing field. Expectations run high, and by nature, soon turn into resentments when they don't materialise as we would have hoped.

A case in point: in 2004, erstwhile communications minister Ivy Matsepe-Casaburri announced the deregulation of the telecommunications industry, legalising the use of voice over Internet Protocol (VOIP) by all telephone communications. Consumers waited with bated breath for a swift drop in call rates. No such luck.

The year 2006 saw the entry of Virgin Mobile SA, at inception a joint venture between Sir Richard Branson's Virgin Group and SA's third mobile operator, 2001 entrant, Cell C. A fifth rung in the telecoms ladder, Telkom's mobile arm, 8ta, launched in October 2010. Ostensibly, consumers came to believe - or rather hope - the influx of other mobile operators would be some kind of panacea for the high cost of communicating. But, while the newcomers appeared to do their bit to introduce cheaper products - try as they might - this didn't force the general prices down in any tangible respect.

The fact is, the duopoly held by Vodacom and MTN for seven-odd years, following the onset of SA's mobile industry in 1994, hasn't really unfurled. Vodacom still holds almost half of the industry, with MTN clinging to about 35% of it. This leaves a marginal percentage of market share, which is divided between the three vestiges - Cell C, Virgin Mobile SA and 8ta.

It is official: SA has horribly exorbitant telecoms prices.

Bonnie Tubbs, journalist, ITWeb

Then, two years ago, the Independent Communications Authority of SA (ICASA) raised consumers' hopes once again, when it sprung the announcement that it would cut mobile interconnect (termination) rates, proposing a three-year glide-path for both mobile and fixed service licensees. Mobile interconnect rates would drop to 40c by March 2013, announced ICASA - which said at the time the cuts must show 100% pass-through to the consumer. Again, unlucky for the consumer, for whatever reason, of which there are likely to be many, the seemingly splendid news didn't directly translate into substantial savings for South African cellphone users.

But wait - before certifiable depression sets in - there may be a glimmer of hope on the horizon yet. This week, our beloved authority announced it would probe the communications value chain in its entirety, to determine why exactly SA's telecoms prices are so darned high. The investigation is purported to get to the bottom of the perpetual price predicament and determine whether ICASA needs to intervene in the sector, and whether it needs to impose cost controls, or assist operators in rolling out infrastructure investments.

Suffice to say, there is nonetheless a lingering bitter taste in the mouths of consumers sporting fresh wounds. I sense this, because having recently taken the liberty of garnering an inventory of sentiments from a group of cellphone users regarding the cost of mobile telephony in SA, a number of choice terms, including “cartel”, “anti-competitive”, “extortion”, “rip-off”, “crazy fees”, “seriously steep”, “villainous”, “criminal” - and some others that would be inappropriate to publish - came up.

But we live in hope. Perhaps ICASA's investigation could herald a new dawn for SA's inflexibly expensive telecoms rates. All things considered, perhaps we shouldn't hold our breath - bated or otherwise.