The Tanzania Communications Regulatory Authority (TCRA) plans to reduce the country’s mobile interconnection rates across all networks by 69% in March this year.
According to the telecoms regulator, reducing these rates - which operators charge each other for making calls across networks - is part of a plan to boost competition in that country’s telecoms sector.
The TRCA proposes that interconnection call rates in the East African nation be slashed to $0.02 cents per second from the $0.06 cents that customers are currently paying.
Innocent Mungy, spokesperson for the TCRA, said the planned reduction is based on a cost survey that the regulator commissioned auditing firm PriceWaterhouseCoopers (PWC) Tanzania to conduct, reported Bloomberg
“We are doing this to encourage competition in the sector, and to ensure calling is affordable to consumers,” Mungy said.
However, the country’s telcos are not pleased with the regulator’s plans to reduce calls fees.
Tanzania’s Guardian newspaper has reported that operators are calling for a gradual reduction in call rates. They have argued that the proposed reduction is too big to adopt at one go, and that it may potentially affect communications investments.
Operators such as Vodacom Tanzania, Millicom International Cellular (MIC), Tanzania Limited (Tigo-Tanzania) and Airtel Tanzania say a 69% drop is just too much and may be disastrous to the sector as investment shares could also drop.
Tigo, through their legal officer, offered a rate reduction plan of 25% annually that they believe to be favourable to all parties concerned, which was backed by its competitors Airtel and Vodacom Tanzania, reported the Guardian newspaper.
“We already have investment plans set and even allocated budget amounts,” Airtel’s legal officer, Clara Mramba, has been quoted as saying.
“Such changes can affect the company’s performance,” she added.
According to research from BuddeComm, the Tanzanian government has actively embraced the principles of competition as a means of rapidly advancing economic development, especially in the telecoms sector.
However, high import tariffs on telecoms equipment and taxes on telephone facilities by various authorities are placing a burden on investors and operators, says BuddeComm.
At the end of 2011 Tanzania’s mobile market broke the 60% penetration barrier, with annual subscriber growth of more than 20%, according to BuddeComm.
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