New hero's? Or new ways of taking advantage of the consumer?

In the past week or so we've heard that ICASA has now approved the drop in interconnection fees put forward by the mobile operators - obviously sticking to their guns that further drops are in the pipeline.

What I find interesting however is that good old Telkom suddenly jumped on the bandwagon announcing that they will ensure that 100% of that drop will be passed on to the consumer. Now in the past Neotel was the one positioning themselves as the consumer champion stating that these savings must be passed on to the consumer and that they're ready as an organisation to ensure that this happens. But when the drop is approved they go dead quiet?

It almost makes you wonder if they are really planning on passing this saving on to the consumer. If it were me, I'd be putting it out there with detailed pricing, so that my customers know. But that's only if it were me...

Another interesting development (albeit not new) is the drop in bandwidth pricing in the market. When Neotel launched in 2008, their pricing was really good at 8c/MB. Considering you can now get ADSL connectivity at around R14/GB and you are seeing the emergence of really innovative ISPs providing affordable connectivity, Neotel better shake a leg and make a plan to truly bring in the competition it was created to bring, as was highlighted by Ben Kelly's recent plea on myBroadband - http://mybroadband.co.za/news/Broadband/11521.html.

And while we're on the topic of pricing - isn't it amazing how Telkom can now emerge as the hero for its customers by passing on this saving? Makes me think we have really been taken for a ride, considering that they own all their infrastructure and have been charging exorbitant rates...

And finally - one last gripe - it takes Neotel's entry into the market, building a fibre network to get Telkom to wake up and start building a proper network? Their so-called Next Generation Network will hopefully pave the way to real broadband - but why oh why have they waited so long???? We've been getting crappy connectivity at crappy prices for so long and now they wake up? My gut feel, they've got something up their sleeves - let's bring in the technology and then find ways to squeeze every last cent out of the consumer thereof. Who knows they might surprise me for a change...

Let's hope so....

Another run-around for the consumer

It's amazing - we get the news that finally cellular costs will go down only to be dealt another blow - delays, delays and more delays.

So, ICASA has announced that it will not accept the cellular providers' proposal on the lowering of interconnect fees by 29% by 1 March 2010. Now it would be very easy to get upset with ICASA here and say that they're delaying the process as they have done so many times in the past, but hang on! There's more to the story.

So the cellular operators agreed to a 29% reduction in interconnect rates by 1 March 2010, but as part of their proposal to ICASA insisted that ICASA agrees “to an undertaking not to review mobile termination rates until March 1 2013”. So, it's the cellular giants that are actually delaying the process by holding the regulatory body to ransom!

Why? Very simple. ICASA and the DoC have always said that interconnect rates need to come down dramatically as this is one of the reasons by telecommunications in South Africa is so expensive. So the initial discussions were around bringing these rates "dramatically".

My personal view - this scared the daylights out of the operators and their latest move is really their way of preventing sudden dramatic rate cuts.

From a business perspective one can understand as a large chunk of their revenues come from interconnect rates. So a sudden drop in this revenue will not make their shareholders very happy. But on the other hand, they have now played a very harsh card rather than trying to reach middle ground.

Will be interesting to see what ICASA's next step is. They remain “committed to releasing draft regulations on the effectiveness of competition in the wholesale call termination market in March”. So we wait with bated breath to see what the outcome will be.

I have to honestly say - hats off to ICASA for finally taking a stand against the giants. Let's hope there is a quick resolution on this however as we the consumer are still the losers at the end of the day!