Telkom has announced plans to hike consumer line rental charges by a whopping 13,9%. The monthly fee will rise from R166 to R189 on 1 May, the company said on Friday.
The increase, which is more than double South Africa’s rate of inflation, comes just a week after Vodacom announced plans to hike the subscription fees for a range of post-paid packages.
In response to a query from TechCentral, Telkom spokesman Jacqui O’Sullivan said in an e-mail that the increase forms part of a “rationalisation” of the company’s products and services. “Factors that have influenced these fixed-line rental changes include inflation, along with the access-line deficit,” she said.
The access-line deficit is the money Telkom loses for every line in service when only basic line rental is taken into account.
Business users aren’t being spared. Business line rental will rise by 12,6% on 1 May, from R239 to R269/month. However, bundled voice minutes will go up from 100 to 150.
“The updates required swift implementation on Telkom’s part,” O’Sullivan said. “We continue to extensively invest in infrastructure to provide better services and value to our customers, making the product rationalisation an imperative.”
She pointed out that Telkom is offering better value in packages such as its all-inclusive R599/month deal that provides unlimited anytime calls to fixed and mobile networks.
Icasa spokesman Paseka Maleka said Telkom has not filed its proposed tariff adjustment with the regulator, as required, but said it only had to do this seven days prior to the new rates being implemented.
Maleka said Telkom is no longer subjected to price cap regulations. In the past, the company was not permitted to increase the price of any of its products or services by more than 5% above inflation.
Telkom’s decision to increase line rental fees may lead to an acceleration in the decline in the number of fixed lines in service. But Telkom chief operating officer Brian Armstrong last year said the decline in fixed lines, which has been evident for more than a decade, is the result of fixed-to-mobile substitution more than the cost of line rental. — © 2015 NewsCentral Media