Neotel has come out in favour of the government's stance on reducing interconnect fees, the communications network operator said on Thursday.

"It is a step in the right direction to bring down the cost of communications and make it more broadly available to South Africans," the company's MD and CEO Ajay Pandey said in a statement.

"The only way to truly drive competition is to allow for easier market entry."

The reduction in interconnect fees should be visible to customers through tangible cost savings.

"For too long South Africans have been held ransom by a lack of choice and have had to pay these exorbitant fees if they wanted to have access to communications.

"The opportunity now is to pass this saving on to the consumer who traditionally could not afford communications."

A reduction in interconnect rates was a step in the right direction towards bringing down costs, but there were other factors at play as well.

"Changes in licence fees, spectrum fees, acquiring Rights of Way in the process of building a network and associated environmental impact assessments all place additional costs on an operator seeking to challenge existing operations in the market.

"(W)e believe these items should all be reviewed alongside the interconnect issues to ensure that the industry looks at all possible areas of cost-reduction, followed by a clear process to ensure that these savings are passed onto the consumer."

On Tuesday and Wednesday the government held public hearings in an attempt to force telecom operators to reduce interconnection fees.