Mobile communication will go down in value!

Mobile communication will go down in valueAddressing the problem with high tariffs for mobile communication services is one of the primary tasks assigned to Ministry of Communication & Information. There is no point in pretending otherwise: our mobile communication does cost much. A mobile phone has long been a vital need, yet calls are still hitting the subscriber in the wallet.

Upon analyzing the market and reviewing the international solution of this issue, we recommended mobile operators to revise their tariff policies and conduct reduction of prices for services. Business is business, but there also is such concept as “social responsibility”.

Yesterday, the regular session of Council of telecom Operators was held. Its participants came with already prepared offerings on reduction of process for their services. Thus, GSM Kazakhstan LLP under KazakhTelecom, Kar-Tel LLP, and Mobile Telecom Service intend, within the period November 2010 to January 2011, to reduce the cost of the most expensive minute from KZT 29 to 19. Along with that, the average cost per minute will go down to KZT 9.

Also, operators submitted their offerings on reduction of rates for interconnect. Kcell proposed the 20% optimal edge of reduction, Beeline - 10%. Neo offered even bigger reduction, from KZT 19.8 to 5.04.

I, however, advised operators to consider the 20% reduction option, to come to the consistent decision and to think over the possibility for further well-planned reduction of rate.

Many of you, might ask why interconnect is given so much attention. The thing is that as early as at their meeting in July, operators had come to opinion that the root of high tariffs problem is in the too high rates for interconnect. What does it mean?

For example, average cost of a call to other operator’s number is KZT 36. Of this, KZT 19.98 is the payment for interconnect (i.e. inter-network connection). The remaining sum is the prime cost and operator’s revenue. As you understand, any operator will never make out the cost of one minute lower than the rate for interconnect. No one wants to operate at a deficit. Hence, the reductions of rate for interconnect automatically lead to tariffs reduction.

I believe, operators’ announcement today is a good beginning. And, as the saying goes, if there is a beginning, there certainly will be continuation. To my mind, mobile companies should be constantly regulating their tariff policies. Because time zips along …

Zhumagaliev A.K.
Minister of Communications and Information


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