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Rwanda reviews mobile call charges

February 21, 2011 • Mobile and Telecoms

This morning, the Rwanda Utilities Regulatory Agency (RURA) announced that it has commissioned a study to establish whether the current interconnection fee among telecom operators is favourable or if it should be lowered to allow for more balanced competition.

Rwanda telecom operators pay Rwf40 (US$0.06) per call made to a competitor’s network. The incumbent mobile operators MTN Rwanda, Tigo Rwanda and Rwandatel don’t share the same view on the current interconnection rate. MTN, the market leader in terms of subscriber base, believes that the fee should not be lowered because it is reasonable.

Tigo and Rwandatel, the second and third largest players by subscriber base, believe the current interconnection rate should be lowered.  The two telecoms say the fee is high and it favours MTN that already has more subscribers.

MTN says that Rwandatel owes it more than US$1million worth of outstanding interconnection payments. In an interview in September last year, Rwandatel’s Chief Commercial Officer (CCO) Mr. Francis Egbuson said Rwanda should lower interconnection fees as Kenya did.

“What happened in Nairobi [Kenya] is a clear example,” he said, adding, “They did not scrap it but they brought it down to a point where it is no longer a differentiator for an incumbent who has had the advantage of a larger subscriber base. I think that it should be reviewed, looked at and made in such a way that the field is level regardless of the subscription base.”

Market regulator RURA also believes that a high interconnection fee is a bottleneck to mobile penetration. ”As a regulator, we see that as bottleneck because they [telecoms] cant price lower than the interconnection,” François Régis Gatarayiha, the Acting Director General of RURA said. He added, “If we manage to bring down the cost of interconnection that they pay to each other, that will give them more room to adjust their pricing.”

Pricewaterhousecoopers, a global consulting firm, has been selected to carry out the study, which is expected to provide findings in three months’ time. Given the regulator’s position and the position of the two small market players, the study may  endorse lowering the fees.

By Angela Meadon

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