Number Portability supports healthier competition between Telecoms

Earlier this year, the Rwanda Utilities Regulatory Agency (RURA) announced that Rwanda wasn’t ‘ripe enough’ at this point in time for ‘number portability’.  What’s that, you ask? Say for instance that you have had your cell number for a number of years and wish to migrate to another operator for reasons as obvious as better rates; you can do so under the condition of taking a different number from your new provider and foregoing the number you mistakenly thought to be yours!

Earlier this year, the Rwanda Utilities Regulatory Agency (RURA) announced that Rwanda wasn’t ‘ripe enough’ at this point in time for ‘number portability’.  What’s that, you ask?

Say for instance that you have had your cell number for a number of years and wish to migrate to another operator for reasons as obvious as better rates; you can do so under the condition of taking a different number from your new provider and foregoing the number you mistakenly thought to be yours!

Now imagine, if you will, having to change your business cards and letterheads, having to notify all your contacts of your change in number and making sure to update every single service you have given it to as contact number (i.e. banks, social security, etc)!

Who would want to go through all that trouble? Given what we know, are we really free to shift to any provider we so choose? I think not. Truth be told, your number is an active part of you, at the same token as any of your other worldly possessions; Laying claim to it is effectively owning an important part of the mindboggling equation that is ‘your life’!  That’s on a personal level.

When it comes to what was said about our country not being ‘ripe enough’, RURA could not have been further from the truth. According to the regulating authority, allowing ‘number portability’ would stop cold any deeper penetration of cellular telephony currently deemed ‘too low’, pushing the different networks to solely concentrate on their respective client base. I beg to differ. Though I fully agree on the need for more people to have access to cell communication, it is my conviction that maintaining the ‘status quo’ gives an unfair advantage to the oldest player in the market to the detriment of the newcomers. 

The ‘oldest player’ in question has indeed enjoyed a quasi monopoly in the market for ten years during which it has grown a major client base. This privileged position gave it the unfair advantage of imposing an outrageously high fee for calling its numbers from the newcomers’ respective networks.  

Today, even if you believe the newcomers have better offers and you desire to join them, chances are you will be discouraged by the existing ‘network to network’ rates. In clear terms, if you enjoy a low fare on your newcomer’s network (between 3 and 10 RWF per minute), as soon as you have to call the other network, they’ll charge you the consumer around 90 RWF, 40 RWF of which is what the calling network actually pays the receiving one; the remaining 50 RWF being their profit margin. Is this a fair estimation of what the “interconnection fee” should be?

Not according to decent independent surveys which place the actual cost at lower than 5 RWF. In light of such a revelation, one can only wonder about the huge existing gap between what is and what should be. The fact of the matter is that interconnection’s sole purpose is to allow for the networks to talk to the other. Sure enough, the fee might be slightly upped to discourage migrations but certainly not at such outrageous levels. It is therefore my contention that our local scenario discourages the networks to look for a deeper penetration.

Why should the “monopolist” look for other clients when they “own” most of the market? On the contrary, they will naturally look for ways to maximize the profitability of their existing business. Their easiest course of action will therefore be to keep you inside their network by making it very inconvenient to leave your number behind and restrict you to only calling inside your network by making it too expensive to call outside of it. This vision of maximizing every inch of their networks will in turn have the adverse effect of discouraging the development of third party value adding service suppliers; they will push them off their business and handle those services themselves.

Allowing such expensive interconnection rates while delaying number portability in the country can only contribute to maintaining the unfair monopoly of one to the detriment of many.

Allow the end-users to freely move with their number and watch what real competition is all about; only then would we see some real improvement service wise. And surely this would push ALL the actors to look for more clients beyond the existing base. The burden would be more equally shared by the different competitors. The regulating authority needs to come back to the drawing board to lay out a comprehensive way of protecting competition by regulating in a fair way for all actors.

In conclusion, allow me to say that not only do I think Rwanda is ‘ripe’ enough and ready for number portability, any further delays to implement it will delay deeper penetration of cell telephony and accessibility to more of us. And this will have a negative impact on wealth creation.

alberuda@gmail.com

 

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