Telkom applies for tariff hike

By Staff Writer for Telkom
Johannesburg, 23 Jun 2009

Telkom has submitted an application to the Independent Communications Authority of SA (ICASA) to have a price increase of 1.7% spread across its products.

The increases will come into effect at the beginning of August, if the regulator approves the company's application.

“Telkom has an ongoing commitment to provide our customers with the best possible service at a fair price, within the context of current economic realities,” says Telkom's group executive for national sales and marketing, Godfrey Ntoele.

While the 1.7% will be an overall increase, not all products will be affected. “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,” adds Ntoele.

Prepaid beating

Telkom's price filing with ICASA will see the tariffs of certain services increase, others decrease, while some remain unchanged.

Postpaid customers can expected to see an increase in per second billing of local calls by 4.2c for normal time and 2.1c for Callmore time. Long distance calls will keep the same cost. Telkom Closer 1 subscription charges will increase by 7.4% and Closer 2 by 5.6%.

According to Ntoele, Closer 1 customers will receive free local and long distance weekend calls of up to an hour during Callmore time.

PrepaidFone, both on a weekly or monthly system, as well as postpaid residential and business line rental charges, will see an increase of 5.5%. PrepaidFone Waya-Waya annual subscription will increase from R120 to R130 per year.

PrepaidFone looks to be taking the brunt of the increase, with local and long distance calls envisaged to shoot up by 10%.

The company seems to be taking the coming influx of international visitors for 2010 into consideration and has not increased any of its international tariffs. Indeed, Telkom says the cost of calling the UK, US, Germany, France, Portugal, New Zealand, China and Australia will decrease.

Data better off

The company may be hoping its DSL service will be this year's financial bolster, since it has not increased the prices of its DSL, DO Broadband and TelkomInternet services. Instead, it will give customers extra bandwidth. TelkomInternet customers with 2Gb and 3Gb offerings will now be upgraded to 3Gb and 5Gb offerings.

“Customers of Telkom's data products will see considerable savings, with data tariffs in the basket decreasing by 6% overall,” says Ntoele.

Telkom has to start competing with Neotel's consumer rates, which are some of the most competitive locally. This time last year, Telkom applied for and received a 2.4% increase to tariffs at a time when most industry analysts were expecting the company to drop prices.