Telkom has reduced its retail rate for calls from its lines to independent telecoms operator Switch Telecom's network by 18% from R1,07 (including VAT) per minute to R0,88 (including VAT) per minute after Switch agreed to decrease its wholesale call termination rate to Telkom and other operators.
This is according to Gregory Massel, MD of Switch Telecom, who says that the decision to reduce its termination rate will translate in significant call cost savings for both Switch Telecom’s customers and other parties calling Switch Telecom subscribers.
Termination rates refer to the charges that one telecommunications operator charges another for terminating calls on its network and termination may take place on a fixed or mobile network.
Explains Massel: “For example, a customer of Telkom wishes to call a business that has an MTN cell phone. Telkom will charge the customer a fee per minute (the retail charge) for this call. MTN will also charge Telkom a fee for terminating the call on its network. This termination rate therefore forms part of Telkom's cost of providing the call to its customer.
“The decreased termination rate, combined with Telkom's decreased rate to connect to our network, would have a knock-on effect on our customers' customers, as it would be significantly cheaper to contact them,” he says.
Massel explains that changes in the regulatory landscape with the Independent Communications Authority of South Africa (ICASA) now planning to regulate interconnection rates in terms of chapter 10 of the Electronic Communications Act, Switch Telecom as a responsible telecom service provider has taken the lead by aligning its termination charges closer to the cost price.
“The reduction of termination rates charged by MTN, Vodacom and Cell C is long overdue, and the high cost of telecommunications has long been identified as a major contributor to the high cost of doing business in South Africa. Switch Telecom believes that the move to reduce termination rates further will have an impact South Africa's economic landscape. Already, Switch Telecom has committed to reducing its own retail rates for calls dialed to mobile networks as soon as the reduced mobile termination rates come into effect,” he says.
However, adds Massel, Switch Telecom's value offering is not just about low telecoms costs.
“Our value proposition veers around a fully-fledged telco service as a viable alternative to the incumbent fixed telecom provider, core voice quality and reliability, and above all, guaranteed technical support.
“Additionally, many of our customers do not have access to fixed telecommunications lines and Switch Telecom provides them premium services over wireless connectivity to ensure that it is business as usual for them,” he says.