SAfrica eyes reduction of phone interconnection fees

* To cut fees to 60 cents vs 1.25 rand by Nov

* Eyes further reduction by 15 cts annually until 2012

* High charges due to collusion by dominant operators

JOHANNESBURG, Sept 15 (Reuters) - The South African government plans to hold public hearings next month to demand that mobile and telecom operators reduce interconnection fees, in an attempt to lower telecoms costs that have impacted the country's growth.

Mobile phone and telecoms operators charge 1.25 rand per minute in peak times for their interconnection fee, a charge to enable calls to be transmitted from each other's networks.

The country's parliamentary communications committee said on Tuesday these rates were considered to be excessive, backing calls by the communications regulator, the competition watchdog and the department of communications.

The committee said it would hold public hearings on Oct. 13-14 to propose that interconnection rates are reduced to 60 cents per minute in peak times by November, and be further slashed by 15 cents annually until 2012.

"As a general rule the progressive reductions in interconnection rates between 2009 and 2012 should yield concomitant reductions in the actual consumer (retail) prices of telecommunications, " the committee said in a statement.

Analysts say Telkom (TKGJ.J), South Africa's largest fixed telephone group, is likely to benefit from the reduction of interconnection rates, while the review is likely to reduce earnings of the country's largest mobile phone operator Vodacom (VODJ.J) and MTN Group (MTNJ.J).

Vodacom interconnection revenue, which included income from South Africa's third largest mobile phone operator Cell C for national roaming services, rose by 8.6 percent to 8.63 billion rand ($1.16 billion) for the year to end-March.

MTN, South Africa's second largest mobile operator and Africa's biggest, raised its interconnect revenue to 6.9 billion rand in the year to December compared to 6.3 billion in 2007.

"The high costs of mobile and fixed line telecommunications has impacted adversely on the South African economy and negatively on citizens, particularly the poor and marginalized," the committee said.

It added that extremely high telecoms prices in South Africa were a result of "apparent historical collusion between dominant mobile operators in the country - which has placed profits and greed above people".

The comnittee also said this was also a consequence of the incapacity of the communications watchdog to effectively regulate interconnection charges. (Reporting by Gugulakhe Lourie)