Regulator slashes call costs by 70%

The Tanzania Communications Regulatory Authority (TCRA) has reduced call interconnection rates by 69 per cent to 34/92 from the previous 113/-.

The reduction of rates means that customers will no longer need to own several SIM cards or carry two handsets as they strive to cut cross-network call costs.

With high interconnection rates, it is only four per cent of Tanzanians who use off net calls, according to TCRA director general, Prof John Nkoma, as majority prefer on-net calls (calling within the network) as they avoid exorbitant charges associated with calling a different network.

Prof Nkoma told journalists and representatives from telecommunication firms in Dar es Salaam yesterday, that all telecommunication companies would be supposed to consent to the new interconnection rates by March 31, this year, even though the rates will start being applied as early as March 1, this year.

“Taking into account that telecommunication sector is very competitive in the market, we gave them freedom to make decision on the amount they would like to interconnect, but they failed. This made the authority to consult PricewaterhouseCoopers.

“We intervene where we see market failure, especially when telecom companies fail to reach agreement on the interconnection rates,” said Prof Nkoma

From March 1, 2013, Prof Nkoma said interconnection rates from one network to another will be Sh34.92, January 1, 2014 (Sh32.40), January 1, 2015 (Sh30.58), January 1, 2016 (Sh28.57) and January 1, 2017 (Sh26.96).

“These are directive interconnection rates, telecommunication companies are free to lower it even to zero, and, TCRA will be ready to make some reviews where necessary and upon justified reasons of doing so,” said Prof Nkoma.

He said the exercise was not new because since 2004, the authority has been doing so.

“The first determination on interconnection rates was made in 2004, the second determination was done in 2007 and the third determination has been done this year,” according to Nkoma.

“The authority dismisses arguments by some operators that reduction of interconnection rates will hinder the roll-out and expansion of networks in the rural areas because there is no direct relationship between interconnection rates and the investment or roll-out in the rural areas,” said Prof Nkoma in response to telecoms concerns

He said TCRA believes that the Infrastructure Sharing, Universal Communication Service Access Fund (UCAF) and the National ICT Broadband Backbone (NICTBB) if utilised properly will augment efforts to cut cost and facilitate rollout in rural and underserved areas.
Source: The Citizen, www.thecitizen.co.tz, reported by Sturmius Mtweve in Dar es Salaam

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