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22 June 2009

Telkom files for 1.7% tariff adjustment with ICASA

As Telkom has consistently done in recent years in its continued drive to promote affordable telecommunications access, Telkom's proposed overall annual tariff adjustments - filed today with ICASA (Independent Communications Authority of South Africa) - is well below the overall increase permitted by the regulator’s Price Control Formula.

The Price Control Formula implemented by ICASA uses the formula of "Consumer Price Index (CPI) minus 3.5% plus carry-over". This formula - using the April 2009 CPI of 8.4% as is required by regulation - would have allowed Telkom to file an overall increase of either 19.7% (including carryover of 14.8%) or 4.9% (excluding carryover).

However, Telkom's price-filing with ICASA seeks an overall increase in its basket of products and services of only 1.7%. Pending ICASA approval of the price filing, Telkom's new tariffs will become effective on 1 August 2009.

"Telkom has an ongoing commitment to provide our customers with the best possible service at a fair price within the context of current economic realities. Containing our proposed tariff adjustments to substantially below the Price Control Formula as well as the CPI, tangibly demonstrates this commitment," says Godfrey Ntoele, Telkom's Group Executive for National Sales and Marketing Operations.

Adds Ntoele: "Pricing is a key element of the value proposition and our pricing strategy is aimed at improving our competitiveness in areas where competition is expected to intensify."

Telkom's price filing with ICASA will see the tariffs of certain services increase, others decrease while some remain unchanged.

The minimum charge for postpaid local calls (0-50km) remains unchanged but the per second tariffs for Standard and Callmore time increase by 4.2 cents and 2.1 cents per minute respectively. The tariffs for long distance calls (>50km) remain unchanged.

PrepaidFone (weekly and monthly) as well as postpaid residential and business line rental charges only increase by 5.5% while the PrepaidFone Waya-Waya annual subscription will increase from R120.00 to R130.00 per annum. PrepaidFone local and long distance calls increase by 10%.

Outgoing mobile/cellular calls as well as outgoing calls to Neotel, Other Licensed Operators or OLOs (previously known as VANS) and Under Serviced Area Licences (USALs) remain unchanged.

Overall, the impact on international call rates will be 0%, with tariffs to certain destinations such as Swaziland and Namibia increasing. These changes are aimed at bringing the rates more in line with the cost of providing the service. On the other hand, calls to fixed-line destinations in countries such as the UK, USA, Germany, France, Portugal, New Zealand, China and Australia will decrease.

The monthly subscription charges for DSL, Do Broadband and TelkomInternet remain unchanged. However TelkomInternet all access 2Gb and 3Gb standard offering bandwidth customers will gain substantially as their respective offerings will be upgraded to 3Gb and 5Gb standard offering bandwidth.

Customers who subscribe to the Telkom Closer 3, 4 and 5 calling plans - with 1300 free minutes per month, pure per-second billing for fixed to mobile calls, and free calls of up to an hour during Callmore time - will be glad to note that their current tariffs will remain unchanged.

Telkom Closer 1 and 2 subscription charges will increase by 7.4% and 5.6% respectively, but subscribers to Closer 1 will enjoy a significant enhancement.

Explains Ntoele: "With effect from 1 September 2009, our Telkom Closer 1 customers will receive free local and long distance weekend calls of up to an hour during Callmore time."

Furthermore, customers of Telkom’s data products will see considerable savings, with data tariffs in the basket decreasing by 6% overall.

"For the past few years we have been aligning our prices to be more competitive and in line with international standards, related costs as well as business and economic considerations. Having complied with regulatory prescriptions, Telkom is confident that our proposed price changes will be approved by ICASA," concludes Ntoele.

For further enquiries, please contact:

Pynee Chetty

Senior Specialist: Media Relations

Group Communication

Tel:+27 12 642 1716

Mobile: +27 81 389 7874

Email: chettpr2@telkom.co.za

 OR

Leigh-Ann Francis

Specialist: Media Relations

Group Communication

Tel: +27 12 642 1728

Mobile: +27 81 391 4780

Email: francilm@telkom.co.za

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ABOUT TELKOM:

Telkom is a leading communications services provider in South Africa. We had consolidated operating revenue of R16.8 billion and normalised profit after tax of R1, 683 million for the period ended 30 September 2015. Total assets amounted to R41.9 billion and equity attributable to the owners of Telkom to R23.5 billion as of 30 September 2015. The group generated normalised free cash flow of R1.4 billion for the period ended 30 September 2015.

As of 30 September 2015, we had approximately 3.3 million telephone access lines in service and 1,030,441 ports connected via MSAN access. We offer business, residential and payphone customers a wide range of services and products, including:

  • fixed-line retail voice services using PSTN (Public Switched Telephone Network) lines, including ISDN (Integrated Services Digital Network) lines, and the sale of subscription based value-added voice services and calling plans;
  • fixed-line customer premises equipment rental and sales services both voice and data needs and these include PABX, Computers, Routers, Modems, Telephone handsets and other ancillary equipment;
  • interconnection services, including terminating and transiting traffic from South African mobile operators, as well as from international operators and transiting traffic from mobile to international destinations;
  • fixed-line data services, including domestic and international data transmission services, such as point-to-point leased lines, ADSL (Asymmetrical Digital Subscriber Line) services, packet-based services, managed data networking services and internet access and related information technology services;
  • Data Centre Operations includes e-commerce, application service provider, hosting, data storage, e-mail and security services;
  • W-CDMA (Wideband Code Division Multiple Access), a 3G next generation network, including fixed voice services, data services and nomadic voice services;
  • mobile communication services, including voice services, data services and handset sales through our mobile navbar-brand called Telkom Mobile;
  •  information and communication services including cloud services, infrastructure services, workspace services, global service integration management and hardware and network equipment sales locally, in seven African countries, the UK and Dubai through Business Connexion Group; and
  • other services including directory services, through Trudon (Pty) Ltd, wireless data services, through Swiftnet (Pty) Ltd.

Convergence is one of our key strategic initiatives in building a sustainable future for Telkom.  We will lead the provision of converged services in South Africa in support of our mission statement: Seamlessly connecting people to a better life.