2006 budget offered slim hope of a reduction in phone tariffs.

The annual budget has given little hope that phone charges will reduce in Seychelles in the year ahead.

In his budget speech to the National Assembly yesterday in his capacity as the Minister of Finance, President James Michel gave no clear indication of an adjustment in trade tax on post-paid phone.

However, the president welcomed recent reductions in rates for both local and international calls.

“Following initial negotiations with Cable & Wireless and Airtel, it is expected that there will be further reductions in the coming year,” the president said.

However, he stopped short of announcing any concrete revision in trade tax, like the 7% adjustment he announced on domestic air travel, for instance.

At present Trade Tax on Airtel post-paid bill is at 12% whereas that on Cable & Wireless stands at 17%.

Seychelles phone charges remain higher than in comparable countries, despite the current price war between the two telecoms – forcing some call tariffs to be cut. But critics say the country’s duopoly scenario in the telecom sector, if anything has over the years encouraged more of a cartel environment with very little benefits passed on to the consumers.

A first Quality of Service (QoS) report in the telecommunication industry published in October shows an increase of 28,000 mobile subscribers in Seychelles between the year 2000 and 2005:

Over 60% of the 54,000 subscribers are pre-paid clients who pay substantially more for their calls than wealthier contract consumers.

Whilst both companies have introduced post-paid packages for employees of large organizations, whereby they pay as low as 28c/min for mobile calls around the clock, Cable & Wireless’ pre-paid customers pay as high as Rs4.22/minute and those of Airtel Rs3.99/minute, during peak hours.

In addition to such exorbitant rates, the two companies still charge their clients per minutes instead of seconds. They also charge them for every three minutes, and not every minute, for fixed-line telephone calls.

But in announcing further liberalisation of the telecommunications industry early this year, the department of Information and Communications (DITC) says, “it is expected that prices will be even more competitive and that both consumers and businesses will enjoy more choices.”

DITC has issued the first VoIP licence to the cable television service provider. By early next year, Intelvision will by means of its cable television network, be able to provide Internet and telephone services.

To ensure its commitment to consumer protection I reckon the DITC ought to take the following actions:
·The introduction of more competition in the
sector,
·Ongoing “regulation of prices” and
·“Once-off reduction” of prices to an acceptable level
that reflects the (real) cost of providing a particular
service.

Although the country is making considerable progress in the liberalisation of telecommunications, critics argue as long as customer services organisations do not have proper channels or have the power to impose sanctions, cell phone tariffs will remain high in Seychelles.