RURA to review interconnection fees

Rwanda Utility Regulatory Agency (RURA) is planning to review the current interconnection fees among telecommunication operators, a move that might lead to a reduction in industry charges.
Telecom masts
Telecom masts

Rwanda Utility Regulatory Agency (RURA) is planning to review the current interconnection fees among telecommunication operators, a move that might lead to a reduction in industry charges.

Currently, the interconnection fee stands at Rwf40 per call, a fee that operators with a smaller market in the telecom industry view as exorbitant.

According to Régis Gatarayiha, RURA’s acting Director General, a study is being commissioned through an international tender to select a professional consulting firm that will conduct a consultative review of the current interconnection costing regime.

“We estimate that the review will take between three to six months from the time of commissioning of the consultancy,” Gatarayiha told Business Times on Monday.
However, the industry regulator emphasised that the fee will be revised downwards only after the study findings have confirmed that the current charge is certainly expensive.

“If   the current interconnection charge between operators is indeed proven to be higher than the actual cost-based charge, RURA will then exercise its regulatory mandate to set a lower interconnection charge than the current one,” Gatarayiha said.

Without divulging details about the magnitude of the reduction, he mentioned that the decision would lower prices in the telecom industry.

“Operators will then have more flexibility to set lower retail prices to be paid by the consumers without having to worry about the off-net interconnection bottleneck,” he observed.

According to RURA, MTN Rwanda is still the market leader, claiming 66.99 percent of the market share with 2.2 million subscribers, as of June this year.

This makes MTN Rwanda the prime beneficiary of interconnection fees when compared to the other telecom operators, Rwandatel and Tigo, with minority market share.

As of June, Tigo’s market share had jumped to 16.05 percent with 529,114 subscribers, surpassing Rwandatel that accounts for 13.4 percent with 443,534 subscribers.

Commenting on RURA’s plans, Andrew Rugege, the Chief Operating Officer (COO) of MTN Rwanda said that interconnection fees are based on the investment made and the cost incurred in the transfer of calls from one network to another.

According to a source in MTN who spoke to Business Times on condition of anonymity, being unauthorised to speak on behalf of the company, currently Rwandatel owes approximately $3.4 million in interconnection outstanding bills to MTN Rwanda.

Last year, the two telecom operators were at loggerheads over the unpaid fees with MTN Rwanda threatening to seek redress from courts of law.

However, the industry regulator says the interconnection fee “has nothing to with any arrears” that may have been incurred between any of the operators.

“It is just one of the regulatory measures to stimulate fair, service-based competition, irrespective of who was first, second or last in the market. The issue of interconnection bills between operators is being handled through the appropriate channels and it should therefore not be linked to this interconnection charge review initiative.” Gatarayiha noted.

Meanwhile government is seriously considering having mobile subscribers register their simcards, a move that Gatarayiha backs saying that simcard registration has become a common global trend and it has been adopted regionally as a prerequisite for effective fight against criminals.

“The practical modalities though which this will be done are still being discussed between all stakeholders and will be communicated to the public when concluded.”

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