According to a recent survey among cellular phone users, it turned out that most of them did not know how much they were paying per minute for air time. One of the reasons for this is the interconnection charges. The cell phone operators were wise enough to play down those charges, a trick that practically doubles the cost of a call. In their ads, the companies offer tempting handsets with attractive deals on air time charges, but through the back door, ever so subtly, they rake in NIS 3.5 billion each year in revenues from interconnection charges. We are talking about a cartel here, because the customer cannot choose through which network to dial in order to reach a particular number. So the government must intervene.
When Ehud Olmert took office, there were already recommendations on his desk to slash the interconnect fees. But Olmert rejected them, checked the issue, listened to the rich barons, and only at the beginning of the year commissioned the Analysis consulting firm to investigate the matter. Six months later, Analysis concluded that the fees should be slashed to only 15 agorot a minute in January 2006, that the interconnection charges for sending SMSs should be cut even more sharply, and that the rounding up of calls to the nearest 12 seconds should be stopped. In July, Olmert dropped the bomb: I accept these recommendations. I am all for the consumer.
We feared that now the pressure will begin, with political string-pulling behind the scenes (and all of this while the phone companies are employing every expert going), so that from the original plan, not much would remain. But yesterday, Olmert surprised us all. True, we didn't get all we wanted, but we got a lot.
First: Interconnect charges will be reduced sharply. They will be halved, gradually falling to 22 agorot by March 2008. Interconnect charges for sending an SMS will be slashed to 2.5 agorot by March 2006. It is a pity that Olmert and his budgets division gave up on ending the practice of rounding up calls to the nearest 12 seconds (worth another 6 percent on the cost of a phone call). Just to make sure the reductions follow through, they are anchored in regulations that can be changed only by both the communications and finance ministers.
Second: Olmert announced he also is adopting the policy of a uniform and inclusive cell phone call price, which will be set after consulting with the companies. This would be one charge for all calls, irrespective from which network the call originates or where it is heading. To complete the revolution, subscribers must be free to switch from one operator to another while keeping the same phone number, including prefix. This would boost the freedom of choice and power of the customer vis-a-vis the cell phone companies. This reform is included in the Economic Arrangements bill 2005, which means it is also dependent on the good intentions of Olmert and Netanyahu.
The cell phone operators are furious. They will have to become more efficient, but will also try raising their tariffs. We, the consumer, must keep guard and not give in. It's quite unacceptable that our bills go up, and we still don't know what we are paying for.
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