Madam Deputy Speaker, hon members, good afternoon. South Africa's high telephone rates have been of much concern to all in this House, and rightfully so. Telephones, particularly cellular telephones, are the main tools of communication available to our people. Telephones keep us, as South Africans, connected. Our telephones enable us to communicate with people in other parts of the world. Without telephones and Internet, business cannot be conducted. Communication costs in this country are resulting in a potential loss of investment in the economy. High mobile termination rates are impeding any possibility of new entrants into the market.
The intervention I implemented, as the Minister of Communications, has yielded some positive results and it was with the support of my Deputy Minister, the Portfolio Committee on Communications, the staff of the Department of Communications, under the leadership of the director-general, the mobile operators and the South African public at large. This is yet another example that working together we can do more.
I am pleased to announce that the initial reduction of mobile termination rates by Cell C, Vodacom and MTN are as follows. Currently, the situation pertaining to termination rates is the following: At peak hours the rate is R1,25 and off-peak it is R0,77. There is what is then called a blended rate, which is R1,03. What we know of, as consumers, is R1,25 and R0,77. The agreed reduced mobile termination rates are the following: Peak R0,89 and off-peak R0,77. The blended rate has, therefore, been reduced from R1,03 to R0,77. The overall total cost reduction on peak rates is from R1,25 to R0,89, totalling an amount of R0,36. This, hon members is putting money back in the pockets of ordinary South Africans, who need it now more than ever.
With regard to the issue of the effective date of implementation, we have noted that there are various small, medium and micro enterprises, SMMEs, that are reliant on the value chain of interconnection fees. We have, therefore, agreed with Vodacom and Cell C that the effective date for the reduction for them would be February 2010 - this excludes MTN that wants to implement on 1 March 2010. This will allow the mobile operators and the SMMEs to realign their business operations accordingly.
Furthermore, I am glad to report to the House that mobile operators have committed to introduce new and affordable retail products, based on their reduced rates, from 1 December 2009. I have been assured that these developments will also introduce more competition on the retail market. That on its own, hon members, is the big early Christmas and Easter present that we can give to the nation. [Applause.] In the same breath, it is important to emphasise that the commitment we have received is within the parameters of the business imperatives of these operators and that it was voluntary.
In implementing the tariff change, operators are requesting a glide path period that is aimed at facilitating adjustments to their business models, renegotiation of contracts with service providers and, in some instances, changing their billing systems. I will facilitate the process further, by withdrawing the Ministerial Policy Directive on Mobile Termination Rates. A glide path intervention process will, however, be considered for implementation by the Independent Communications Authority of South Africa, Icasa, as it is of a regulatory nature.
My intervention should be viewed as an initial intervention, taking into account the fact that the reduction of the costs to communicate should not necessarily address the wholesale market, but should also make an impact on the retail sector, as this affects end users. Therefore, further consultations between operators and Icasa will still be constituted to conclude the interconnect agreements. It must be recorded that due regard to the principles of nondiscrimination will be applied; therefore, the reduction in rates will be concluded within appropriate interconnection agreements. I will then present the mobile termination rate offers to Icasa for review, consideration and implementation.
In addition to this process, I will be reviewing all other aspects that relate to the cost to communicate; this includes fixed and mobile termination rates for public phones and community service telephones. This is in line with my programme of action on the reduction of the cost to communicate that was recently submitted for approval and approved by Cabinet.
Madam Deputy Speaker, as I promised during my Budget Vote earlier this session, reducing communication costs remains a key priority of mine and the Department of Communications. For this reason, I have elevated it to our Medium-Term Strategic Framework.
Last, but not least, it is important that we should not just celebrate great leaps, but also small steps that make a significant and great difference. I present this report not to sound triumphant, but to acknowledge that small steps can move us forward as a nation and that together we can do more. I thank you. [Applause.]
Mevrou die Adjunkspeaker, dis die eerste aankondiging wat ek vandag hoor van die planne van die Minister. Ek gaan Afrikaans praat omdat dit my moedertaal is, so as u wil luister, is u baie welkom.
In die eerste plek moet ek vir u s, van die DA se kant af, deel ons absoluut die sentiment van die Minister dat kommunikasie so 'n belangrike item in ons land is, want dit bring mense in verbinding met mekaar; dit veroorsaak dat daar nie probleme of misverstande en dies meer ontstaan nie, en dis 'n wonderlike ding wat gebeur. Ons is baie dankbaar dat hierdie sogenaamde interkonneksietariewe verlaag gaan word.
So 'n maand of twee gelede in die Portefeuljekomitee oor Kommunikasie het ons openbare verhore gehad, soos die Minister self weet, en daar het 'n mens agtergekom hoeveel probleme daar is in die entiteite wat onder die Departement van Kommunikasie ressorteer. Die Minister en ons voorsitter, mnr Ismail Vadi, is ook bewus van die feit dat die Onafhanklike Kommunikasie-owerheid van Suid-Afrika, Okosa, nou reeds baie, baie jare lank die voete sleep. Dis my eerste termyn in die Parlement, maar ek wens hierdie dinge was al 'n paar jaar gelede opgelos.
Ons almal het gedink, toe Cell C in 2002 na vore gekom het, dat hierdie interkonneksietariewe gaan daal omdat daar toe 'n mate van kompetisie in die mark was, maar wat het toe gebeur? Daar was ' n styging van 500% tot by R1,25 op die ou einde, en dit is 'n onaanvaarbare situasie. 'n Mens wonder of die Mededingingskommissie nie vroer moes ingegryp het nie.
Daar is net een ding wat ek net graag hier in die Parlement wil s: dit is die rol van die Onafhanklike Kommunikasie-owerheid van Suid-Afrika om te kyk na die strukture, die uitdeel van frekwensies en dies meer. Dis hoekom hulle die Onafhanklike Kommunikasie-owerheid genoem word.
Ek is net bekommerd dat ... Laat ek myself in die rede val: dit s so dat die Minister wel direktiewe aan Okosa kan gee, maar, soos hulle in Engels s, " they're not bound by this directive". Ek hoop dus dit was, soos hulle in Engels s, "that due process was followed," dat alles volgens die wet verloop het en dat dit nie 'n onaanvaarbare ingryping deur die Minister was nie, want Okosa is nie verantwoordelik aan die Minister van Kommunikasie nie. Die raad van Okosa word deur die Parlement aangestel en dan moet hulle onafhanklik optree.
Ons hoop daar gebeur binne Okosa 'n klomp dinge, want dis nie net die telefoonkoste wat 'n probleem is nie; daar is geweldig baie ander probleme ook in Okosa wat die toekenning van frekwensies en dies meer betref. Ons het netnou gehoor van al die probleme in Eskom, en ek wil vir u s met ons oorsigbesoeke wat ons aan Okosa gebring het, kon ons sien daar is baie probleme; daar is gevegte tussen die raad en die uitvoerende bestuur van Okosa, en die personeel is nie baie gelukkig nie.
Daar is dus 'n hele klomp dinge wat in hierdie stadium opgelos moet word, maar namens die verbruiker is ons gelukkig met die verlaging van hierdie koste. Dit was 'n sterk besprekingspunt in die Portefeuljekomitee oor Kommunikasie.
Daar is net een ding, en u het dit self ook genoem. Ek hoop net nie dat hierdie ingryping die markte gaan benvloed nie, want daar kan geargumenteer word dat, as die Minister die mag het om in te gryp en pryse te manipuleer, as ek die woord mag gebruik, van die internasionale ouens sal kan besluit om eerder 'n bietjie versigtig te wees, want hulle kan dalk in die moeilikheid beland. Baie dankie vir die geleentheid, agbare Mevrou die Adjunkspeaker. [Tyd verstreke.] (Translation of Afrikaans speech follows.)
[Mr N J VAN DEN BERG: Madam Deputy Speaker, this is the first announcement I have heard today about the Minister's plans. I will be speaking in Afrikaans because it is my mother tongue, so if you want to listen, you are very welcome.
Firstly, I must tell you that we in the DA absolutely share the Minister's sentiment that communication is such a big issue in our country, as it brings people into contact with each other; it prevents problems and misunderstandings from developing, which is a wonderful thing to take place. We are very grateful that these so-called interconnection rates will be reduced.
About a month or two ago we had public hearings in the Portfolio Committee on Communications, as the Minister himself knows, where we realised how many problems there are in the entities that fall under the Department of Communications. The Minister and our chairperson, Mr Ismail Vadi, are also aware of the fact that the Independent Communications Authority, Icasa, has for many, many years now been dragging its feet. This is my first term in Parliament, but I wish these things had already been solved a few years ago.
We all thought that when Cell C stepped up in 2002, the interconnection rates would drop because there was a degree of competition in the market, but what happened then? In the end there was an increase of 500% up to R1,25, and this is an unacceptable situation. One wonders whether the Competition Commission should not have intervened sooner.
There is just one matter I would like to mention here in Parliament: namely the role of the Independent Communications Authority of South Africa in looking at the structures, the allocation of frequencies and so on. That is why they are called the Independent Communications Authority.
I am just concerned that ... Let me interrupt myself: it is true that the Minister may issue directives to Icasa, but, they are not bound by these directives. So I hope, that due process was followed and that everything was done in accordance with the law and that it was not an unacceptable intervention by the Minister, because Icasa does not answer to the Minister of Communications. The board of Icasa is appointed by Parliament and then they must act independently.
We hope that a number of things will take place within Icasa, because it is not only the telephone costs that constitute a problem; there are a great number of other problems in Icasa, also as regards the allocation of frequencies and so on. We have just heard about all the problems in Eskom and I can tell you that during our oversight visits to Icasa we could see that there were many problems; there are altercations between the board and the executive of Icasa, and the staff members are not very happy.
So there are a lot of things that need to be sorted out at this stage, but on behalf of the consumer we are happy about the reduction in these charges. This was a major point of debate in the Portfolio Committee on Communications.
There is just one issue, which you yourself have also mentioned. I just hope that this intervention will not influence the markets, because it could be argued that if the Minister has the power to intervene and manipulate prices, if I may use that word, some of the international firms may decide to be a little careful, because they could get into trouble. Thank you for this opportunity, Madam Deputy Speaker. [Time expired.]]
Madam Deputy Speaker, on behalf of Cope we would like to thank the Minister. We welcome this, and I am sure the South African consumers will cope with this early Christmas box. [Applause.] Cope wants to ensure that Chapter 9 institutions, such as Icasa, are supported to effectively fulfil their mandates. Cope believes that it is the role of the independent regulator, Icasa, not the Minister or the director-general or Parliament, to regulate tariffs and rates. Minister, we welcome the fact that you have intervened in the negotiations.
We just want to caution that we don't want political interference into the role and responsibilities of Chapter 9 institutions. Icasa councillors should execute their legislative responsibilities. If they fail to do that, it is our role to hold them accountable. The law stipulates that they can be dismissed and we should do that. But for that to happen, we need the Minister and the department to forthwith pass the necessary performance agreement with those Icasa councillors. If that is done, which should have been done some four years ago, then we can hold them accountable and get them to carry out their responsibilities.
It is a misnomer to believe that interconnection rates will necessarily result in cheaper cellphone costs. For that to happen, we must open up the market. Therefore, other long overdue regulations, such as fixed number portability regulations, local loop unbundling and all those issues, should be introduced. Only then will the cellphone industry really become liberalised and there will be proper competition within the cellphone and the communication industry as such.
In conclusion, government must not try to be the bride at every wedding ceremony or the corpse at every funeral. I thank you. [Applause.]
Sekela Somlomo, neNdlu ehloniphekile, Mhlonishwa okokuqala sicela ukubonga kakhulu kuCell-C ngokuthi athathe iqhaza eliphambili ahole kulomsebenzi wokwehliswa kwemali yokuxhumana kwabantu.
Okwesibili sithanda ukubonga kakhulu kuwena Mhlonishwa ukuthi ugqugquzele noTelkom ukuthi uma sishaya izingcingo zizokwehla njengoba benzile nalaba abanye ngoba uma beme bodwa ngale eceleni nabanye benza lokho kuzoba sengathithi sikhetha izingane zabantu bandawonye.
Okokugcina-ke siyacabanga ukuthi i-Icasa izowenza umsebenzi wayo. Kanti uma ingawenzi umsebenzi wayo, kubonakala sengathi kulukhuni ukuthi yenze umsebenzi wayo, uyilethe lapha eNdlini, sibagudlule sifake abanye. Ngiyathokoza kakhulu. (Translation of isiZulu speech follows.)
[Mr V B NDLOVU: Deputy Speaker, this august House and hon Minister, firstly I want to sincerely thank Cell C for taking the initiative in taking the lead to reduce interconnection rates across all networks.
Secondly, I would like to sincerely thank you, hon Minister, for encouraging Telkom to bring call rates down as the others have done, because if they are standing to one side all by themselves and others are doing the same thing on the other side it would be as if we are dividing members of the same family.
Lastly, I hope that Icasa will perform its duties. But if it does not perform its duties, and it looks like it is difficult for it to perform its duties, you should bring them to this House, and we will put them aside and put others in their place. Thank you very much.]
Madam Deputy Speaker, hon Minister, I want to assure you that you have not interfered with the independence of Icasa. In terms of the Electronic Communications Act, you have the right to get involved. Therefore, forget about those who said you have interfered. [Applause.] I would like to give special thanks to your director-general. She has worked very hard. Hon Minister, I have been vindicated. In this country we have been paying exorbitant fees to cellphone companies. The Competition Commission that I have laid a complaint with is also going to benefit from this, because they have now voluntarily reduced their costs due to your intervention, and not interference.
I want to tell all South Africans that this is a sign that we as consumers should not just accept these high prices, but should speak up for our rights and take on these operators and companies that have made obscene profits for many years. I thank you. [Applause.]
Adv A De W ALBERTS: Mevrou die Adjunkspeaker, die VF Plus wil die Minister van Kommunikasie gelukwens met die ferm besluit om teen gulsige selfoonmaatskappye op te tree by wyse van die verpligte verlaging van interkonneksietariewe.
Die selfoonbedryf het 'n gulde geleentheid verspeel om tot 'n sinvolle vergelyk te kom in die verband en dis jammer dat hulle nou deur middel van wetlike instrumente gedwing moet word om hul maatskaplike plig teenoor die vuisvoos verbruiker in Suid-Afrika na te kom.
Eintlik moes hierdie proses al baie vroer begin het, maar ongelukkig neem dit 'n krisis om 'n geleentheid te skep, en hier verwys ek na die sokkerwreldbekertoernooi in 2010 wat deur die bre publiek in Suid-Afrika net op tradisionele televisie of selfoon-TV besigtig sal kan word. Die regering het egter 'n verdere belangrike taak om 'n omgewing vir kompetisie in die selfoonbedryf te skep.
Die beste wyse om pryse op 'n volhoubare wyse te bepaal is deur die daarstelling van intense kompetisie tussen besighede. Die verlaging van die interkonneksiefooi kan verseker self 'n bydrae in di verband lewer.
In die algemeen is dit kommerwekkend dat daar steeds maatskappye in Suid- Afrika bestaan wat ongewoon ho winste maak uit 'n brandarm burgery en wat spandabelrig te werk gaan asof daar geen einde in sig is vir hierdie finansile golf waarop hulle ry nie.(Translation of Afrikaans paragraphs follows.)
[Adv A De W ALBERTS: Madam Deputy Speaker, the FF Plus wishes to congratulate the Minister of Communications on the firm decision to act against greedy cellphone companies by means of the obligatory reduction in interconnection rates.
The cellphone industry missed a golden opportunity to come to a meaningful agreement in this regard and it is a pity that they are now compelled by means of legal mechanisms to fulfil their social responsibility towards the punch-drunk South African consumer.
In fact, this process should have started much earlier, but unfortunately it takes a crisis to create an opportunity, and here I am referring to the 2010 Soccer World Cup tournament which w the broader South African public will only be able to view on traditional television or cellphone TV. The government, however, has another important task of creating a competitive environment in the cellphone industry.
The best way to fix prices in a sustainable manner is through the creation of intense competition between businesses. The reduction in the interconnection rates could in itself certainly make a contribution in this regard.
In general it is worrying that there are still companies in South Africa that are profiting from the unusual high prices they are charging impoverished citizens and are operating in a thriftless manner as if there is no end in sight while they are riding on the crest of this financial wave.]
Thank you, hon member, your time has expired.
Adv A De W ALBERTS: Dis 'n onvolhoubare situasie, maar ons wil vir die Minister dankie s vir sy harde werk in hierdie verband. [This is an untenable situation, but we want to thank the Minister for his hard work in this regard.]
Deputy Speaker, the ACDP would like to congratulate the hon Minister on successfully facilitating the agreement to reduce mobile termination rates. The cellphone industry leaders appeared unlikely to reduce rates unless there was significant regulatory or political pressure. So, we are impressed.
The Department of Communications studied the benchmark South African communication costs against our peer countries, comparing us to Brazil, Chile, Korea, India and Malaysia, and found that our country has exceptionally high telecommunication prices, relative to our peer group countries, and that we had the least competitive market.
Interconnection rates were designed to help the mobile operators bill their networks when they launched; and these are not necessary now. Industry commentators said the evidence was overwhelming that there was little justification for pushing the fee up in the first place. They have estimated that a fee of R0,10 to R0,25 would now be more than adequate to cover the costs.
We are looking forward to your ongoing success in the interest of the people of South Africa and future development. I thank you. [Applause.]
Hon Deputy Speaker, the MF welcomes the Minister's intervention in addressing the high telephone rates and Parliament has to implement this immediately. Vodacom and MTN plough millions of rand into marketing programmes, which come from the unusually high tariffs that the citizens have to pay. Most people are using mobile phones. Operators must not only be user-friendly, but price-friendly. We urge the Minister not to delay in the implementation of the lower costs. I thank you.
Deputy Speaker, the ANC and the Portfolio Committee on Communications welcome the statement by the Minister of Communications that a voluntary agreement on reducing mobile termination or interconnection rates has been reached among all the mobile and telecoms operators in the country.
The Minister has achieved in four months what the Independent Communications Authority of South Africa, Icasa, failed to do in four years. This interim measure is an encouraging and positive development. Parliament must appreciate the significance of this voluntary step by the mobile and telecoms industry and it must recognise the leadership offered by the Ministry of Communications.
We are also heartened by the news that some mobile operators have indicated that they are going to introduce specific relief measures through promotional offers to cash-strapped consumers in December. This, together with the reduction in interconnection rates by March 2010, will ultimately benefit virtually every citizen in our country, as it will become cheaper next year to communicate using cellphones and home telephones. We must acknowledge that these voluntary initiatives by mobile and fixed line operators have placed the interest of the public before profits. This is precisely what the committee had championed in September this year, when it adopted a resolution calling on the mobile operators to drop the interconnection rates with effect from 1 November 2005 to R0,60 per minute during peak times. The committee further called for interconnection rates to be reduced by R0,15 annually for each successive year until 2012. We were absolutely clear that interconnection rates are excessive and not in the best interest of the public. This high cost of mobile and fixed telecommunications has impacted adversely on the South African economy and negatively on our citizens, particularly the poor and marginalised.
Today, some might legitimately ask the question: Has the committee achieved all that it had set out to do in its resolution? That is not the real issue; the fact is that ours is a proposal for consideration by mobile and telecoms industries and other stakeholders in civil society. It was meant to stimulate a robust and hearty debate and it was aimed at educating consumers and galvanising them to support the call for a reduction in telecommunication costs in our country. In fact, during our public hearings in October, almost all the written and oral submissions made supported the call for reductions in interconnection and retail rates. The only question up for debate was the extent of the reduction and the speed with which it was to be effected.
We are more than satisfied that for the first time in almost a decade, there is now a tangible and positive reaction from the industry to government's call for a reduction in telecommunication costs. The demand for reductions of mobile and telecommunication costs has been on the agenda for a number of years. For example, former President Thabo Mbeki said in his 2007 state of the nation address:
With regard to communications, I'm pleased to announce that the Department of Communications together with the mobile telephone companies and Telkom are finalising plans to address call termination rates this year for the benefit of the consumers.
It is now a matter of history that no agreement was concluded in that year. This issue was again raised by President Zuma in his state of the nation address on 3 June 2009, when he said, "overall we will ensure that the cost of telecommunications is reduced through the projects underway to expand broadband capacity". There can be no doubt that progress has now been made.
There is an outstanding issue that I wish to touch on briefly. The committee supports the idea of a glide path to progressively reduce interconnection rates over a period of time. Such an approach will help to balance the competing objectives of the affordability of mobile and telecommunication services to the public with the principle of fair profitability of private companies. On this question, our view is that the glide path should perhaps be determined by Icasa and not the industry itself. Any final decision on the glide path by the industry alone might convey a negative perception that the industry is again acting in its own interest. The actual decreases in interconnection rates and the timeframes of the glide path should rightfully be determined through an Icasa-led process based on empirical data rather than through an arbitrary process managed by the industry itself.
I must point out that a major responsibility now rests on the shoulders of Icasa. In the past it had not succeeded in reducing interconnection rates. It lacked clarity of purpose and confidence to act decisively. Icasa now needs to act with courage, efficiency and professionalism. It must duly follow the steps set out in chapter 10 of the Electronic Communications Act and issue final regulations on interconnection rates.
All outstanding issues, the question of a flat rate; asymmetrical rates; the timeframe for a glide path and the rate by which interconnection rates are to be reduced over the next few years must be determined by Icasa based on its research. We are aware that it is not the responsibility of Parliament to intervene on these issues. It is strictly the remit of Icasa. It must do its job and its actions must inspire confidence in the sector.
Finally, I'd like to thank all political parties for the nonpartisan approach they adopted on this issue. In dealing with Icasa and the approach to the mobile operators, I think it was quite clear that we worked as a united front and on a nonpartisan basis because that was in the public interest. It is a very important step to co-operate to advance the interest of our citizens. Thank you very much. [Applause.]
Debate concluded.