Trade union Solidarity on Thursday said it had sent a memorandum to the Independent Communications Authority of South Africa (Icasa) calling for a significant cut in the interconnect fee, and a thorough investigation into its true cost.

Solidarity, pointed to exorbitant tariffs currently paid by customers, which benefited cellphone companies who provided a service that potentially cost far less to provide.

Solidarity's reaction follows talks between Icasa, Telkom, Neotel and various cellphone service providers earlier in the week regarding the possibility of reducing the interconnect fee. Solidarity said it welcomed talks between the stakeholders, but warned that a slight fee reduction only would not be acceptable.

The trade union called on Icasa to initially drop the current interconnect fee, which is fixed at R1.25 for cellphone-to-cellphone and landline-to-cellphone calls, to a maximum of 60 cents per minute.

The original fee was fixed at 20c per minute in the early 1990s, the union pointed out, adding that it has since seen a 525 percent increase.

"The fee was originally fixed on the assumption that there would be about 500 000 cellphone users in South Africa to cover the necessary costs for establishing the infrastructure.

"However, this assumption is outdated. According to a study by the Target Group Index, nearly 72.9 percent of South Africans, or 35 million people, had access to cellphones in 2007," said Solidarity spokesperson Jaco Kleynhans.

"In addition, it is estimated that there are currently more than 50 million sim cards in use in South Africa, and this figure is still increasing. For many years now, the resulting lower cost per consumer has created the opportunity for a much lower interconnect fee than the current one. A lower fee will eventually benefit consumers as well as smaller competitors in the industry," Kleynhans said.

Solidarity highlighted Namibia as a case in point having taken the decision earlier this year to lower its interconnect fee, as an interim measure, from N$1.06 to 60c per minute, with an aim to gradually reduce the fee even further until 2011.

"This is being done even though it was found that, with the current technology, interconnectivity in Namibia costs only about 12c to 35c per minute.

"The same gradual reduction could also be implemented in South Africa ? a country that has considerably more cellphone users per square kilometre and where cellphone companies consequently already have an advantage over their counterparts in Namibia as far as cost per cellphone user is concerned," Kleynhans said.