When the Tide Goes Out, Some Prices Still Swim Upstream
Every year, like clockwork, the telecom industry announces price adjustments. Most of the time these are justified with familiar phrases: inflationary pressure, network investment, or operational costs.
Running national infrastructure is not cheap. But there is an interesting contradiction playing out in South Africa’s telecom landscape. While many underlying wholesale costs have steadily decreased, some retail tariffs—particularly from legacy providers like Telkom—continue to climb.
That raises an obvious question: if the wholesale plumbing keeps getting cheaper, why is the water bill still going up?
Let’s start with the plumbing.
Interconnect Rates Have Been Falling for Over a Decade
Interconnect rates—regulated by the Independent Communications Authority of South Africa (ICASA)—are the fees telecom operators charge each other when a call moves between networks.
For years, ICASA has deliberately reduced these rates to stimulate competition and lower consumer prices.
Historical Mobile Termination Rates (South Africa)
In simple terms, termination costs have dropped by more than 95% over roughly a decade. The regulator’s intention was clear: lower wholesale costs should encourage lower retail prices and stronger competition.
Yet Retail Tariffs Still Climb
Despite these decreases, many enterprises still see annual tariff increases on voice and connectivity services.
To be fair, telecom operators face legitimate costs including fibre network expansion, data centre infrastructure, energy and power backup, support staff, and spectrum investments. But the uncomfortable truth is that retail pricing often moves independently of the wholesale cost trends underneath it.
In other words, the economics of telecom have shifted dramatically, but many enterprise contracts still reflect pricing models from ten years ago.
The Benchmarking Gap
Most companies simply do not have the time to continuously benchmark their telecom environment. Tariffs vary across SIP trunks, mobile contracts, WAN circuits, cloud voice platforms, international routing and licensing bundles.
Add multiple suppliers and contract anniversaries into the mix and things quickly become complicated. And complexity is exactly where unnecessary spend tends to hide.
As the old saying goes in telecom cost management: where there’s mystery, there’s margin.
Why Benchmarking Matters More Than Ever
Telecom pricing is no longer static. It evolves constantly due to regulatory changes, declining termination costs, cloud voice adoption, and increased competition.
A rate that was fair three years ago may now be significantly above market.
Without regular benchmarking, organisations risk paying outdated tariffs, missing renegotiation opportunities, and accepting increases that are not market aligned.
Where JOLT Fits In
This is where JOLT TEM (Technology Expense Management) plays an important role.
JOLT does not sell networks or promote specific suppliers. Instead, JOLT works independently for the client to audit telecom bills, benchmark tariffs against the market, identify pricing anomalies, challenge supplier charges and drive cost optimisation.
In simple terms, JOLT ensures organisations understand exactly what they are paying—and whether it is justified.
Final Thought
Telecom pricing has changed dramatically over the past decade. Wholesale costs have fallen, technology has improved and competition has increased. Yet many enterprise tariffs continue their slow upward march.
That is why benchmarking should not be a once-off exercise. It needs to be a routine discipline. Because in telecom spending, the companies that measure and question are usually the ones that save the most.
See. Act. Save.
