The Independent Communications Authority of SA (ICASA) today said it had approved the tariff structure Telkom will implement next year.
According to Telkom, private users will pay an average of 9.9% more on regulated services. Local calls will increase by just over 12%, long distance calls by 12.5% and calls to cellphones by 5.6%.
The regulator can block Telkom`s increases only if the company fails to comply with the official rate regime which governs it, and ICASA says there were no such flaws. However, as in previous years, it is clearly not happy with the increases.
"The authority emphasises that the regulation provided Telkom with a ceiling, and not a floor," it said in a statement today. "Thus the authority notes with dissatisfaction that although Telkom could have made a decision to increase tariffs by a lower level, it chose to use its full allowable level of increase which was 9.5% after forfeiting R320 million. This increase may be in line with regulations but unfortunately the same cannot be said about government`s inflation target."
The official inflation target is between 3% and 6%.
ICASA also points out that the increase is based on a year-on-year inflation rate of 12.5%, but economists have a positive outlook for the economy next year, when the Telkom increases will be applied, with inflation of around 8% expected in the first quarter.
ICASA is not the only body to have lamented the increases. Reserve Bank governor Tito Mboweni and finance minister Trevor Manuel have at various times called for administered prices to be kept low to combat inflation and have named Telkom and Eskom among the culprits.
Industry umbrella group the Communications Users Association of SA (CUASA) is not happy with the increases either, but says things could have been worse.
"The new regulations closed quite a few loopholes and didn`t give Telkom quite as much room to manoeuvre as before," says Ray Webber, a member of the CUASE executive committee. However, CUASA has called on ICASA to tighten the regulations even further with an annual review of the actual impact that increases have. That way, Webber says, penalties can be imposed if the real increase goes beyond what is essentially a projection.
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