New cell rules to boost competition

JOHANNESBURG – New rules allowing South Africans to switch mobile phone networks but keep their number will stoke competition in Africa’s biggest market but fail to make a major dent in high tariffs, a study showed on Tuesday.

Technology research group World Wide Worx said a study into the impact of mobile number portability showed 20 to 25 per cent of contract customers want to switch networks once the new rules come into effect on Sept. 18.But World Wide Worx Managing Director Arthur Goldstuck said he expected only about half of those would actually do so.Goldstuck said only forcing companies to slash the fees they charge to connect calls to each others’ networks – which they pass on to customers – would lead to significantly lower tariffs for consumers.The rules would not affect pay-as-you-go customers, which account for about six out of seven SIM cards in South Africa.”We don’t expect this to be a big-bang excitement but over 24 months …we will see gradual excitement,” Goldstuck told a briefing.”I don’t think there will be a major impact on price.”Consumer groups have accused South Africa’s three mobile networks of overcharging customers and some had hoped mobile number portability would prompt them to cut prices to retain lucrative contract and corporate customers.Goldstuck said Vodacom, jointly owned by Britain’s Vodafone and fixed-line firm Telkom , stood to lose the most customers from the new rules.Unlisted Cell C, which is third-ranked after Vodacom and MTN, could gain the most.The study showed about 22 per cent of lucrative corporate customers – more than half of which subscribe to Vodacom – planned on changing network, with 27 per cent of consumers and 19 per cent of small and medium-sized businesses ready to change.South Africa is Africa’s biggest mobile market with about 70 per cent penetration compared to about 15 per cent on the continent as a whole but more than 100 per cent in Europe.Nampa-Reuters18.But World Wide Worx Managing Director Arthur Goldstuck said he expected only about half of those would actually do so.Goldstuck said only forcing companies to slash the fees they charge to connect calls to each others’ networks – which they pass on to customers – would lead to significantly lower tariffs for consumers.The rules would not affect pay-as-you-go customers, which account for about six out of seven SIM cards in South Africa.”We don’t expect this to be a big-bang excitement but over 24 months …we will see gradual excitement,” Goldstuck told a briefing.”I don’t think there will be a major impact on price.”Consumer groups have accused South Africa’s three mobile networks of overcharging customers and some had hoped mobile number portability would prompt them to cut prices to retain lucrative contract and corporate customers.Goldstuck said Vodacom, jointly owned by Britain’s Vodafone and fixed-line firm Telkom , stood to lose the most customers from the new rules.Unlisted Cell C, which is third-ranked after Vodacom and MTN, could gain the most.The study showed about 22 per cent of lucrative corporate customers – more than half of which subscribe to Vodacom – planned on changing network, with 27 per cent of consumers and 19 per cent of small and medium-sized businesses ready to change.South Africa is Africa’s biggest mobile market with about 70 per cent penetration compared to about 15 per cent on the continent as a whole but more than 100 per cent in Europe.Nampa-Reuters