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TCRA slashes phone interconnection rates

31st January 2013
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  LCharges cut from 115/- to 34/90 per minute effective March, this year
TCRA Director General Prof John Nkoma

The Tanzania Communications Regulatory Authority (TCRA) yesterday officially announced new, progressively declining interconnection rates for telecommunication networks from March 1, this year tAccording to the regulatory agency, voice call termination rates for 2013 will be 34/90 down from 115/- in 2012. The rate for 2014 will be 32/40 dropping to 30/58 by 2015 and further to 28/57 in 2016. The rate will be   26/96 in 2017.

Announcing the new rates in Dar es Salaam yesterday, TCRA Director General Prof John Nkoma said the interconnection rates are still high when compared to other African countries.

He added in reducing the rates, the authority had taken into account that interconnection rates across the world have dropped in the past five years.

According to him, the decision was made by a panel of experts from different universities and international organisations after conducting a cost study of each mobile phone firm and coming up with conclusions in accordance with the laws and
o December 31, 2017.regulations governing the ICT sector in the country.

“We established that the current rates are high and customers are forced to carry either more than one mobile phone or simcard because of the costs of making a call to a different mobile firm,” he said.

With the application of the new rates there will be no need for a person to carry more than one phone or simcards.

He said the agency conducted an inquiry involving all telecommunications network operators and other stakeholders as per TCRA Procedures for Rules of Inquiry of 2004.

Prof Nkoma said the panel established that all operators are in agreement that the current interconnection rates are high and should be reduced. However they differ on the rate and percentage of reduction. 

During the meeting, he said, some of the mobile companies rejected the results, each proposing a different interconnection rate, arguing that a drastic decrease will affect their capacity to invest in rural areas.

However other companies accepted the results and proposed even further reduction of the interconnection rates and went further to suggest that voice call termination rates should be applied from this month.

Prof Nkoma said all mobile phone operators are required to apply the new interconnection agreements and submit the same to the authority by the end of March this year, adding that they have enough time to make preparations.

Either TCRA said it is in agreement with the panel of inquiry’s observation that outgoing international calls are not subjected to regulation because an international gateway operator must pay to the carrier to terminate a call in foreign country and the charges should continue to be determined through commercial negotiations.

“This is an order from the Authority and the government to all mobile operators and they should follow it if they are licensed,” he said.

He added that mobile operators have been allowed to reduce the rates as much as they can due to the market competition but not to increase them.
During the inquiry mid this month major Telecommunication operators in the country refused to adopt the proposed interconnection rates and instead called for a gradual reduction.
They argued that the proposed reduction was too big to adopt at a go, fearing that it may potentially affect communication investments.

They argued further that, they are not against the government motive, but that the drop was too steep to bear and may very well be disastrous to the sector as investment shares may also drop rapidly from businesses withdrawing their stocks to reinvest elsewhere.

SOURCE: THE GUARDIAN