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21 February 2014

MTR delay not in public interest

Recent moves to oppose new Mobile Termination Rates (MTRs) will delay reducing the cost of calls to the consumer, and are not in the public interest.

Telkom is relieved that the initial delay to the implementation of Mobile Termination Rates will not be as long as originally anticipated and will be implemented on 1 April 2014.

Any delay to this implementation is to the detriment of consumers, who have in the past benefited from Telkom’s commitment to pass through savings derived from previous regulatory interventions.

Previous interventions have stimulated the industry to become more competitive as all players have moved to offer lower retail prices following these interventions.

Telkom Group CEO, Mr Sipho Maseko says, “Telkom always strives to carry through these savings to our customers. In the past four years Telkom has passed on significant savings to customers as a direct result of the lowering of MTRs.

“As it stands Telkom Mobile still offers the lowest call rate of 29 cents on our Sim-Sonke offer.

“This delay means that larger mobile operates will continue to enjoy favourable termination rates at Telkom’s expense especially if we consider that from 2001 to 2012 Telkom has subsidised these operators.

“This has ultimately constrained our ability to offer even better retail prices to our consumers,” concluded Mr Maseko.

Additional Information

Alphonzo joined Telkom on the 3rd of January 1984. He is a 30-year veteran and held various positions in the organisation. Prior to his appointment as the CTO, he was appointed as the Managing Executive: Network Infrastructure Provisioning on 1 July 2010. He was also the Group Executive: Wholesale & Marketing Operations from November 2007 until June 2010. He held various senior management positions in the following divisions: Broadband Technology, Planning, Engineering, Operations, Capital Project Management and Human Resources. His tenure at Telkom also includes a nine-month assignment with SBC (AT&T) in 1998.

He holds a Bachelor's of Technology (BTech) as well as a National Technical Diploma in Telecommunications and a National Diploma in Human Resource Management. He has also completed the Executive Leadership Program and the Program on Enterprise Leadership for Executives.

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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.