Uganda bracing for another price war

Uganda is bracing for another price war

Uganda’s telecom market has been gripped by yet another mobile price war. That has led to the Uganda Communications Commission (UCC), the Uganda communications industry regulator, to reconsider reducing interconnection rates between mobile networks.

The UCC may reduce the current rate price as from September 2011.

UCC Director of Competition and Corporate Affairs David Ogong is consulting with telecommunications operators in the country over the possibility of further reducing interconnection rates as an attempt to increase mobile penetration in the country. The current mobile penetration in Uganda is about 35%.

The current rate of Shs131 (less than USD$1) per minute is a reduction from Shs180 per minute established in 2010. However, the current rate is more than double Kenya’s interconnection rate of Shs60 per minute. Some users have expressed frustration at the high costs.

“The commission is also in the process of reviewing interconnection rates and we expect off-net rates to come downward,” says Ogong.

Despite the high optimism of telecom analysts and mobile users in the country, telecom operators in Uganda have become more forceful in their opposition to the continued reduction of rates, calling on the UCC to allow the market to reduce prices when necessary.

Andrew Matapare