Cellphone operator MTN joined its rival Vodacom on Wednesday in committing to a closed-door session with the national assembly’s communications committee to discuss its cost structures.
MTN MD Karel Pienaar, pictured, made the commitment in writing to committee chairman Ismail Vadi during the committee’s public hearings on what it says is the excessive and exorbitant costs of mobile termination rates in the industry. These are the fees one network charges another for receiving calls on its network.
Vodacom agreed to a similar discussion with the committee during its presentation on Tuesday.
During the question and answer session following Pienaar’s presentation to the committee on Wednesday, some MPs again raised operators’ reluctance to discuss costs in the open committee.
Pienaar reminded the MPs of his commitment to a further in-confidence discussion on the issue. The main reason for that was not so much to do with MTN’s historic costs, he said.
“That we’re less worried to be public about it. It’s more to talk about, when you do cost analysis you need to look at the future and investments, and what that is. And there’s some confidentiality issues there that I don’t particularly want my competitors to know about,” Pienaar said.
The discussion about reducing costs was long overdue. “I think it’s one we need to prepare ourselves [for] so that we can break it down in a form that directly relates certain costs to what the impact would be.
“If we agree on a cost going forward, it does directly impact on how we define our investments. If you want to define your investments, you have to be very specific, hey I want to roll-out this and this higher speed data, this and this time.
“Now, I don’t think it’s in the interests of competition in this country that we communicate that and it certainly, commercially, could disadvantage me if I let my competitor know long beforehand what I am doing.”
Pienaar said MTN was also fully committed to working with the Independent Communications Authority of SA to reduce costs. “We are absolute committed to that process, have contributed to that process, continue to… We are meeting again next Friday on that process, so we are committed.
“In my mind, it’s just the amount and the steepness, and speed [of the reduction] that we’re really discussing. We all accept that interconnect has to come down, it has to change.
“It hasn’t changed for a long time, it needs to take the new cost and cost environments [into account]. We need to go through the process and come to a new number and that’s the process we’re committed to,” he said. — Sapa
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