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Telkom CEO's open letter 'not an attack'

Sipho Maseko says he wrote to MTN and Vodacom to share his company’s views on termination fees.

Telkom CEO Sipho Maseko. Picture: Sapa.

JOHANNESBURG - Telkom Chief Executive Officer (CEO) Sipho Maseko on Wednesday said his open letter was not an attack on cellphone giants Vodacom and MTN.

Speaking on The Money Show this evening, he said Telkom was merely sharing its view on mobile termination rates with the public.

The letter, published in the Sunday Times, has been described as an emotive effort to urge the two companies not to block the Independent Communications Authority of South Africa (Icasa) from lowering costs.

Maseko's comments come after MTN and Vodacom approached the courts in a bid to stop a reduction in mobile termination fees.

In the letter, the CEO charged the two companies of "standing in the way of the country's future".

Under Icasa's proposal, operators such as Cell C and Telkom Mobile will see rates decrease from 40 cents to 20 cents.

The changes were initially meant to come into effect on 1 March, but the date was moved to 1 May following legal action.

Mobile termination rates affect the fees companies charge each other for calls between different networks.

Maseko said, "These companies [MTN and Vodacom]are at least 30 times larger than Telkom."

He says the reduction will make the playing field more even.

The CEO says both companies earned exorbitant profits from these fees for something they never worked for.

Both Vodacom CEO Shameel Joosub and MTN CEO Sifiso Dabengwa deny the assertion, saying they are fully in favour of lowering mobile termination rates.

The two say they are opposed to the process that Icasa has followed.

Both companies say they want to challenge the matter through the legal system.

Maseko says the figures released by Icasa reveal Vodacom and MTN's excessive revenues are solely attributable to termination rates.

"We're saying that the two bigger telecoms companies earn in excess without having to work for it. It's a cost to us and we want to reduce that cost to lower tariffs and to invest further in the network."

"It's practical, it can be done very quickly and it is very evident what needs to be done."

Maseko adds it's unfortunate the two companies approached the courts.