Time to stop subsidising Vodacom, MTN – Telkom

Time to stop subsidising Vodacom, MTN – Telkom

The time has come for South African part state-owned operator Telkom to stop subsidising private operators through unfair mobile termination rates (MTRs), according to chief exective officer (CEO) Sipho Maseko.

In an interview with the Sunday Times, Maseko said Telkom had paid around ZAR60 billion (US$6 billion) over the last seven years to terminate calls, but had only received “a pittance” in return from an “unjust” relationship.

Operators pay a maximum of 40c for calls terminating on other networks, but calls terminating on Telkom’s network cost 12c. Maseko said it was unfair that companies such as Vodacom and MTN had been able to make profits and grow while Telkom Mobile was unprofitable.

“It’s been through Telkom subsidies that companies like Vodacom and MTN have been able to grow internationally,” he said, appealing to the Independent Communications Authority of South Africa (ICASA) to allow the company to charge more.

“We are in the water with Michael Phelps and we’ve got to swim with lead irons on our legs,” Maseko said.

He said the company had plans to operate Telkom Mobile under “a different model” and made it clear it would not be shut down. A fibre optic network is central to this, making copper cabling unnecessary and saving money.

Maseko also acknowledged that Telkom service had often been “woeful”, but that fewer problems could be expected with a fibre optic network.

Telkom Mobile launched in March, but not without controversy as it appeared to ditch the 8ta brand, something the company denied.

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