Cell phones. 70% of the country has a cell phone, only 17% have a landline at home, according to research by Eighty20 into AMPS 2009. We are dependent on our cell phones to communicate. Communication is the grease in the economy. With such low landline penetration but such high mobile penetration cell phones are the backbone of how we get things done. Cell phone costs in South Africa are massively high. According to research published by the Communications Minister, compared to other countries, and taking into account purchasing price parity this is what we pay in interconnect costs in US dollars.

• South Africa 27,06 cents (R1.97)
• Malaysia 4.56 cents (R0.33)
• India 1.97 cents (R0.14)

The government has finally come to this party and directed the cell phone networks to reduce their interconnect charges. the interconnect charges are artificially high and this has been due to the cell networks attempting to limit competition with new entrants and to create a cosy club where these massive corporations can rest easy and make wild profits at the expense of the consumer. We are in a recession, if we were paying too much previously we are definitely paying too much now. The cell networks are trying to use threats to maintain their artificially high profits.

The fact of the matter is that lower interconnection fees will benefit the entire economy and whilst the cell networks are fabulously rich they do not control the economy nor should they believe that they have more clout than they do. The cell networks know that the consumer is trapped and can go nowhere as the networks all charge these ridiculous fees, so it becomes the responsibility of government to ensure that the market is not stitched up by the incumbents. This battle will be hotting up in the months to come but what is very clear is that the days of profiteering are over and that the winds of change are blowing in the cell phone sector.

Carte Blanche video on interconnect rates: