Telkom: Are customers being sucked dry?

Post by **Thrall** » 09 Jun 2004, 14:52

By Angela Quintal

South Africans will know later this year whether Telkom is ripping them off, or whether its fees are in fact reasonable, when these come under review by the independent communications regulator, Icasa.

Telkom, which continues to have a monopoly on fixed lines, posted a record net profit increase of 177 percent to R4.5-billion for the past financial year.

On Tuesday Democratic Alliance MP Dene Smuts told the National Assembly's communications committee that given Telkom's dazzling results, its high fees could no longer be tolerated. She urged Icasa, to force Telkom to file lower phone tariffs, when it comes for review later in the year.

"In our view they cannot be allowed to get away any longer with phone tariffs at the rate they've been getting every year."

She was supported by the Inkatha Freedom Party's Suzanne Vos, who told the Icasa board members: "Your role is to protect consumers, where Telkom has all of us by the throat.

"We have a second national operator coming on line - clearly it's going to cherry-pick.

"We heard from the (communications) department that they don't expect that this duopoly will bring down prices. It's a kind of con job going on with the public."

Vos wanted to know whether there was anything in the agreement that would militate against a decrease in telephone costs.

However, Icasa chairperson Mandla Langa said the regulator was as much in the dark as everyone else.

"We haven't seen that secret/confidential agreement and we are also waiting with bated breath to have sight of that, because it might possibly give us, like the Rosetta Stone, some answers."

On lower telephone costs, Langa said the government was anxious about the high cost of telephony and its impact on investment. "There has been a real, sincere need to look at this and to find a means, because it is seen as a disincentive to investment, it is seen as a barrier to entry, and is therefore economically unviable and has to be reviewed."

Once costs were lowered, it would boost competition, and would benefit consumers, Langa said.

Outgoing Icasa councillor Mbulelo Ncetezo told MPs that the new regulations on costs of services, known as the Chart of Accounts and Cost Allocation Manual (COA/CAM), would go a long way to solve the problem.

"We will be able to look at the cost structure of Telkom and whether they cross-subsidise their services."

Icasa was expecting Telkom's reports at the end of June or July, Ncetezo said.

"Those reports will be analysed properly, in such a way that we can deal with lots of problems."

Ref: IOL

RuadRauFlessa · Post by **RuadRauFlessa** » 09 Jun 2004, 14:56

Dr_Jung · Post by **Dr_Jung** » 09 Jun 2004, 15:59

Don't hold your breath waiting! Telkom put in thousands of kilometers of both copper and fibre lines during the last four years. They have known for a long time that another player would enter the field. The new "kid on the block" who is no more than a black empowered consortium (Escom, Transtel, BEE and one overseas participant) will have no option but to lease landlines from Telkom. They will be as greedy as Telkom thus a price decrease is only a pipe dream. If we consider how the mobile networks (of which there are now three, with a new entrant in the offing)are rippping us off, Telkom pales in comparison!
Even though Escom will hang their fibre on existing power pylons, landline is all important!

RuadRauFlessa · Post by **RuadRauFlessa** » 09 Jun 2004, 16:01

Dr_Jung always the optemist

Dr_Jung · Post by **Dr_Jung** » 09 Jun 2004, 16:09

AH Ruad, that way if things turn out for the better I can be pleasantly surprised!

RuadRauFlessa · Post by **RuadRauFlessa** » 09 Jun 2004, 16:31

me likes

Post by **Thrall** » 09 Jun 2004, 18:05

Dr_Jung wrote:...The new "kid on the block" who is no more than a black empowered consortium (Escom, Transtel, BEE and one overseas participant) will have no option but to lease landlines from Telkom. They will be as greedy as Telkom thus a price decrease is only a pipe dream

Yup - what I've been saying all along. Even if they aren't going to be greedy, Telkom is hardly going to give it away to their only competitor.

bb_matt · Post by **bb_matt** » 09 Jun 2004, 18:06

Dr_Jung sounds like a realist.

There's no way that Telkom will drop thier rates any time soon and even if they do, it will only apply to the roll-out of "new products"

It wouldn't suprise me if Telkom were lining Icasa's pockets with kick-backs.

Ahhh, the cynic in me ...

RuadRauFlessa · Post by **RuadRauFlessa** » 10 Jun 2004, 07:13

bb_matt wrote:It wouldn't suprise me if Telkom were lining Icasa's pockets with kick-backs.

Anways Go check out telescums website they have a new ADSL service with a 4GB cap and lower rates. But what puzzles me is that they have a business package there with the same cap and all (no special features or anything from the home user package) that costs about R200 more.

lancelot · Post by **lancelot** » 10 Jun 2004, 08:56

Ruad wrote:

Anways Go check out telescums website they have a new ADSL service with a 4GB cap and lower rates. But what puzzles me is that they have a business package there with the same cap and all (no special features or anything from the home user package) that costs about R200 more.

That is a very interesting observation! Telkom's largest customers are obviously business concerns, yet they, without shame, target them when it comes to higher pricing! If you call out one of their 40 day wonder teccies to your home and he finds that maybe your fax or portable phone is causing the problem, you are charged R145.00 for the call, if the same thing happens at your business address phone, you are charged R450.00! A most unusual marketing approach, don't you think? Overcharge your largest target market because that is where your biggest profits lie, knowing full well that there is sweet nothing that can be done about it! The new provider will do the same thing! Do Telkom still hold 50% of Vodacom, I speak under correction, but I think they do, how is that for a finger in every pie?

RuadRauFlessa · Post by **RuadRauFlessa** » 10 Jun 2004, 09:22

I would rather say that they hold more than that in every Cell provider in sa since your cell signal has to go through at least one telcom router

Post by **Synkronos** » 10 Jun 2004, 10:36

Ruad: The cost of the new 4Gb unshaped service (R800ish) replaces the cost of the old Prolog or PrologPlus account (around R200ish). So the R800 is on top of your ADSL subscription. Ands up costing you more than a grand a month for it. And a topup account will hence cost you another R800 as well. Sounds pretty shyte to me :/

Post by **Thrall** » 10 Jun 2004, 12:31

contents deleted Lancelot

RuadRauFlessa · Post by **RuadRauFlessa** » 10 Jun 2004, 12:40

Sorry bout that. is there a mod in the house that would remove that since I wouldn't want to do irreperable damage to poor old Icasa

Done Lancelot