You will have no doubt seen the headlines in the media. Mobile operators are being hauled of the coals for excessive interconnect costs (the money it costs to terminate a call on a network other than your own).

After ICASA’s failure to address this, Parliament has finally become involved and basically accused the mobile operators of making disproportionate profits as this interconnect cost is being passed onto the customer – with a markup.

While I am not defending the mobile operators and their business practices (okay, maybe I am), ask yourself how many companies add a markup to what are essentially third party products are services. Car parts are marked up when a dealership services your car. Ceramics and building materials are marked up when a renovator installs a new kitchen. And how many people, let alone the Government, question the postages and petties that a lawyer or large consultancy marks up when billing you?

Consider how much profit Microsoft makes on a Windows license? How much profit does Volkswagen make on a Citi Golf – a product who’s R&D costs were recovered in the early 80s?

Think about the massive investment in infrastructure that mobile operators have made and the communication possibilities that they have brought about. For example take Nigeria with a population of 150,000,000. The country has 1,300,000 fixed telephone lines (this is a market penetration of less than 1%) meaning that only one in a hundred people have access to a fixed line telephone. Contrast this to the 63,000,000 mobile lines and almost half the population now have access.

In South Africa the mobile penetration is almost 100%. Think about the improvement to the quality of life that the mobile telephone (and operator) has made, and then tell me and parliament that they are making too much profit.

Of course it does not feel great getting fleeced by any service provider, but if it’s too expensive and you can’t afford it, or think you’re getting ripped off – don’t buy it! It’s pretty simple.

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