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Government goes for the cellphone jugular – at last

South Africa’s cellphone operators (especially MTN and Vodacom) are masters at frustrating regulators and negotiating themselves into plum positions. Perhaps they tried those old tricks and, for their trouble, got the carpet-bombing response. Or perhaps this is a replay of the mining royalties saga, where the impossible demands of government turn out to be a tactic rather than a goal. Either way, the department of communications on the weekend said it would demand cost price interconnect rates from cellphone operators by November. Cost reductions of up to 50% have been mooted. And never mind that the deadline is a logistical impossibility, or that the impact on corporate earnings would be apocalyptic. But it wouldn’t be surprising if thousands of beleaguered and frustrated consumers already have the bubbly on ice. Now we’ll get to see how good these operators really are at the classic charm offensive.


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