East Africa gears up for single tariff on calls

Saturday July 19 2014

People using mobile phones. Tanzania and Burundi are not part of the deal because they missed meetings that led to the planned regional tariff plan. Photo/FILE

Telecom compnaies in East Africa are getting ready to implement the regional telecommunication framework for a One-network-area that is expected to reduce the cost of calls.

The new tariff regime was agreed to by Kenya, Uganda, Rwanda and South Sudan, at the fifth Heads of State Summit for the Northern Corridor Projects held in Nairobi in May this year.

“We plan to assess the framework and review our tariffs within the guidelines agreed upon,” said Nzioka Waita, the corporate affairs director at Safaricom.

Tanzania and Burundi are not part of the deal because they missed meetings that led to the planned regional tariff plan.

In a statement released last week, Communication Ministers John Nasasira of Uganda, Jean Philibert Nsengimana of Rwanda, Dr Fred Matiang’i of Kenya and Juma Stephan Lugga of South Sudan said the regional framework for the One NetworkArea would apply to telephone calls originating and terminating within the region.

No surcharge


The statement further mandates member states to exempt regional calls from surcharges applied by local operators on international incoming calls as well as additional charges on subscribers on account of roaming within the region.

“There will be no charges for receiving calls while roaming within the region and subscribers travelling within the member states will be charged as local subscribers in the visited country,” the statement says.

This will require telecom operators within the region to re-negotiate bilateral agreements to ensure full implementation of the OneNetwork Area by September 1 for Uganda, Kenya and Rwanda and December 31 for South Sudan, the ministers said.

Initially, telecom companies in the region like Kenya’s Safaricom and Uganda’s MTN and Uganda Telecom Ltd entered into mutual agreements, allowing their subscribers to travel and make calls within the EAC at no extra costs.

READ: EA countries, S. Sudan root for single call rate system

Uganda’s MTN, MTN Rwanda and Tanzania’s Vodacom made a similar arrangement taking after the borderless network innovation that was pioneered by Airtel’s predecessors Celtel and later, Zain in December 2006 across its operations in Uganda, Kenya and Tanzania.

However, Rwanda’s introduction of a $0.22 tax per minute on all incoming calls in August 2012 by the Rwanda Utilities Regulatory Authority (Rura) sparked off a wave of similar taxes on international calls across the region.

Uganda introduced between $0.2-$0.25 levy per minute a year later, followed by Tanzania charging $0.12 and Burundi, $ 0.16.

As a result, operators reviewed their call tariffs upwards to meet their operating costs as well as to make profit.

For instance, MTN Uganda and Vodacom Tanzania raised their tariffs from Ush295 ($0.11) and Tsh349.8 ($ 0.21) per minute to Ush1, 500 ($0.56) and Tsh700 ($0.41) per minute respectively for calls terminating onto the Rwandan networks.

Uganda Telecom also raised call tariffs from Ush450 ($0.17) to Ush499 ($0.19) on the Kenyan networks, and Ush999 ($0.37) on Tanzanian networks, while Safaricom raised tariffs from Ksh18 ($0.20) to Ksh25 ($0.28) to all calls terminating onto Uganda, Tanzania, Burundi and Rwandan networks.

Further, Airtel Uganda raised its tariffs from Ush300 ($0.11) to Ush360 ($0.13) for calls destined to Kenya, Ush600 ($0.22) for Tanzania and Ush900 ($0.34) for Rwanda.

This resulted into the costs of calls within the region more expensive compared to calls destined to India, USA, and China, with the Kenyan operators charging an average of Ksh5 ($0.06) per minute and Uganda’s Ush300 ($0.11) per minute.

Justina Ntabgoba, the corporate affairs manager at MTN Uganda told The EastAfrican that the telco was studying the proposed tariff regime.
“We need to make an assessment of the whole arrangement before making any decision because this is not a promotion,” she said.

Uganda’s private sector is upbeat that the new move is expected to ease the costs of doing business, at the time the region is implementing the common market protocol.

“We are so happy with the pace at which our governments moving to facilitate trade. The reduction in the costs of connectivity especially in making calls in going lower the costs of doing business and thus more profitability,” said Gideon Badagawa, the executive director at the Private Sector Foundation Uganda.