Telkom SA Limited files an average tariff adjustment of 2.7% for 2004

Telkom SA Limited has filed its 2004 tariff adjustments with the Independent Communications Authority of South Africa (ICASA), in accordance with the Telecommunications Act, 103 of 1996, and regulations made under the Act. The current regulations impose a price cap formula on a basket of specified services that Telkom previously had the exclusive right to provide, including installations; prepaid and postpaid line rental; local, long distance and international calls; fixed-to-mobile calls; public payphone calls; ISDN services; the Diginet product; and the Megaline product.

Currently, the overall tariffs for all services in the basket may not be increased by more than 1.5% below inflation in South Africa, based on the consumer price index (CPI) and measured using revenue for the services in the basket at constant volumes for the prior year. In addition, the price of any individual product or service included in the basket may not be increased by more than 5% above inflation in South Africa in any year. Inflation is based on the year on year movement in CPI as measured at September 30, 2003. CPI was 3.7% at September 30, 2003.

The current regulation makes provision for the carry over of allowable rate benefits that were not used in the prior year to be claimable in the following year. In the 2003 annual tariff increases Telkom did not utilise the full allowable rate benefits. The amount carried over to the 2004 tariff increases will have a 0.5% impact on the allowable increase in tariffs.

Based on CPI and the carry over allowance from the prior year, Telkom's tariff adjustments for the regulated basket of services represent an increase in revenue of 2.7%, effective from January 1, 2004.

Key tariff changes
The following tables set forth subscription and connection tariffs as of January 1, 2004 and January 1, 2003.