Johannesburg - The latest tariff increases by cellular providers Vodacom and MTN indicate that it may take another five years before consumers realise the benefits of lower costs for telecommunications services.
Details on the tariff increases, effective from October 1, largely apply to the high-end cellphone market and have yet to be detailed publicly.
On average, for Vodacom, tariffs are expected to increase by 9 percent. On a single product they may rise by a staggering 20 percent, making the cost for a standard cell-to-cell call for a contract user about R1,40 for the first minute, up from R1,19.
However, cellular providers will introduce per second billing on high volume users.
This form of billing, which consumer organisations have lobbied for, cushions consumers from being penalised for airtime not used.
Operators are expected to take an estimated 15 percent hit on revenue from the introduction of per second billing. They are also expected to be hit when the new interconnect agreement with Telkom comes into effect.
The tariff increases by the operators come just before the launch of new network provider Cell C in November.
The new billing proposition is widely believed to be a step to dampen Cell C's entry.
The Saudi-owned Cell C's billing plans are not yet clear, but it looks certain to launch per second billing along with other "innovative" packages.
Paul Doany, the chief advisor to Cell C, said the company was aware of the latest moves by MTN and Vodacom.
"They can do two things: act proactively, or wait until we launch and react," he said.
He added that the new entrant's products and offerings contained a host of surprises, plenty of choices and flexible packages.
Product packages and tariffs are going to be the battlefield between the three operators.
Unfortunately, the new product roll-outs by MTN and Vodacom appear more tailored towards protecting profit margins rather than meeting consumer demands for reduced costs.
MTN has said prepaid tariffs would remain unchanged at R2,60 for the first minute of a call during peak time.
Vodacom's new product, Vodacom 4U, promises similar tariffs for prepaid and contract users and introduces international roaming to prepaid.
The department of communications has made no direct comment on the tariff increases, saying this was a matter between the operators and the Independent Communications Authority of South Africa.
The regulator approved the increases, saying they were below last month's consumer price index on average.
So consumers will have to fork out more cash for a bit longer before they enjoy lower costs and high quality services.