The Independent Communications Authority of SA (Icasa) launched a discussion paper on the public switched telecommunications rate regime yesterday which seeks to lower the margins by which Telkom is allowed to increase its pricing.
Icasa is soliciting public input on, among other things, Telkom`s perceived levels of efficiency and comparisons with international telecommunications pricing.
The authority has also proposed a new tariff structure that will cut the legal maximum amounts by which Telkom, and its future competitors, will be allowed to raise prices.
The proposal calls for limiting the maximum annual increases for residential customers to 3% below the consumer price index (CPI) and limiting the increase of any individual service to 5% above the rate of inflation. Current rules allow an increase of 20% above inflation.
"We fully accept price cap regulation and the rebalancing of prices to remove cross subsidy before competition becomes fully effective," said Icasa chairman Mandla Langa. "We further appreciate the need to ensure fair competition in telecommunication services which are responsive to the needs of users and consumers."
Earlier this month Icasa expressed concern at Telkom`s planned tariff increase for next year, which would hike prices to the maximum allowed under its exclusive license.
The deadline for public input on the paper is 31 January 2001 and the regulator expects to hold public hearings on the matter early in the year. The process is not expected to lead to regulation before January 2002, however.
Telkom said it would not comment on the proposal before studying the document.
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