South Africa: Govt would intervene to drive down prices, given their level was too high for business

[business day] If enlargement with private telecommunications operators was not effective in bringing down costs, the government would have to resort to regulation and legislation, Communications Minister Siphiwe Nyanda warned yesterday.

Communications and information technology costs in SA were too high and it was a key priority of the government to lower them as part of a broader objective of reducing the costs of doing business in the country.

He said during a media briefing after his budget vote speech in Parliament on Tuesday that telecommunications had been on the agenda for some time, but intervention had not been effective.

The possible collusion between cellphone operators was a "worry" for the government, the minister said. It was something for the Competition Commission and the Independent Communications Authority of SA to deal with.

Termination costs charged by cellphone operators for calls landing with another service provider were "very, very high" and it might be necessary to engage with them about this as well, he said.

Nyanda gave notice in his speech that he intended to appoint an independent panel of experts, whose recommendations would assist him "to design appropriate interventions to address the cost to communicate effectively. We will also continue to develop policies which will contribute to, among other things, reducing the cost to communicate."

A programme of action would also be developed by the department to reduce the cost and improve the quality, availability and usage of information and communications technology.

The department commissioned an independent benchmark study to last year investigate the cost, quality, access and usage of telecommunications in comparison with Malaysia, India, Chile, Brazil and South Korea. "The study confirmed that our telecommunication prices are still high compared with those countries," Nyanda said.

Prices may not even come down with more broadband supplied by new undersea cables, as operators may still keep them high. They stayed high even after competition to Telkom was introduced.

Cut Telecoms Costs or Suffer Regulation, Nyanda Says