The Telephone Department charges for all services. The following table provides the cost of the most common services. These are monthly rentals. Rates for other, less common services are available on request.
What we do with the income
The monthly rental that is charged for telephones is used to run everything to do with the Telephone Department. It must pay for all maintenance contracts, equipment replacement, system expansion and from 2005, all staff salaries.
A further, significant portion of the income has to be retained to cover the replacement cost of the exchanges as and when they need replacement and to this end, the department is required to build up quite a large replacement reserve.
2003
Owing to the depressed state of the Telecommunications market in 2001 and 2002, we were able to negotiate an exceptionally good price to replace the exchanges a little early and so in 2002, all exchanges were replaced after 9 years of use.
Due to the good price we received and the slight reduction in maintenance that comes about with new equipment, we were able to pass the savings on to our customers and so for 2003 we did not need to raise the rental charges. Basic line rental was held at R73.
The next major replacement is estimated to be around 2012 when the replacement cost is likely to be around R9m in today's terms.
2004
For 2004 we had to increase the line rental by 5% to cover the maintenance costs. For reference, the Telkom residential Line charge was R81.90 and the Business line charge was R108.80. Hence we are now below the Telkom residential rate whereas we originally started by matching their Business Rate.
2005
In 2005, the new unified UKZN Telephone Policy has determined that all staff salaries are also to be paid out of the income. This has resulted in a need to increase line rental cost above the CPIX for the next few years. In 2005 the increase has been set at 7.8% which will not fully accommodate the extra salary bill but wil go some of the way towards. For comparison, we are still below the Telkom Residential rate.
2006
In 2006, in keeping with the need to increase a little above CPIX to accommodate the salaries, we have raised the rental by 7.2%. We are still below the Telkom Residential rate. This should be the last year of increases above CPIX as we should balance the budget this year.
One interesting addition due this year will be the incorporation of a Voice over IP (Internet Protocol) provider who will offer us services in competition to Telkom by carrying certain of our calls at a discount to Telkom. This has the potential to save in the region of about 8% of our telephone bill this year. As always, the reduction in call costs will be passed directly to the users - we do not mark up call costs at all.
2007
This year we have only moved the line rental costs up to accommodate salary increases and the annual maintenance cost increases. The high salary increase has had its impact and resulted in us having to raise our income by 6.2%. As usual, this is still below the Telkom increase. The alternate suppliers have not moved as fast as hoped and the second network operator, Neotel has still to offer services. Similarly, the VoIP suppliers have struggled to get agreements in place with Telkom , Vodacom, MTN and CellC and without these agreements, they cannot deliver calls to these networks.
2008
There was no increase this year as Mrs Smith left and a new staff member (Pravesh Maharaj) has arrived to take her place. In the turmoil of the change plus a mess with the accounts from finance, no changes were made.
2009
The telephone section has had to apply a 10% increase this year to cover the years 2008 and 2009. This is in line with Telkom's 2009 increase but recall that Telkom also increased rentals by 13% in 2008 while we kept prices constant. In March 2009 we will be upgrading all of our PABX's to the latest IP enabled units. This will enable us to produce a good cost reduction in our inter campus link costs. Pravesh Maharaj left us toward the end of 2008.