Telecom firms in fresh interconnection row

Rwanda Utilities Regulatory Agency (RURA), on Wednesday, commissioned a study that could come out with new interconnection usage charges, as cellular companies remain divided over a suitable fee. Telecom regulator, RURA, says that it is reviewing the current interconnection regime in order to come up with a fee that is “cost-based”.

Rwanda Utilities Regulatory Agency (RURA), on Wednesday, commissioned a study that could come out with new interconnection usage charges, as cellular companies remain divided over a suitable fee.  

Telecom regulator, RURA, says that it is reviewing the current interconnection regime in order to come up with a fee that is “cost-based”.

The current interconnection fee of Rwf40, which is the charge payable by one operator to another for carrying phone calls of their subscribers, was set in 2006 and the regulator says it is outdated while operators with smaller market say it is exorbitantly high.

Rwandatel, which is the least subscribed mobile operator, suggests that the rate be slashed by as much as Rwf35 to Rwf5 while MTN Rwanda, the dominant player in the industry, favours the current regime. 

According to RURA’s Ag. Director General, Regis Gatarayiha, the current rate was fixed between MTN Rwanda and Rwandatel at a time when Rwandatel was using fixed telephony technology.

“Now we have three operators; we need to have a fair rate,” he added.

RURA’s comprehensive study, which is being undertaken by Price waterhouse Coopers LLP and expected to be complete in the next three months, is highly likely to recommend lower charges.

“After the study, we expect the rate to go down and we will be able to pass over the advantages to our customers,” Rwandatel told Business Times in an email interview, emphasising that, with lower interconnection fees, mobile users will be able to enjoy lower off-net calls.  
“Lower interconnection rates will lead to increased subscriber base plus revenues in a long run hence meeting government’s plans of having 6 million subscribers by 2012,” Rwandatel stated.

According to RURA’s official statistics released in September, last year, all the three operators have a combined 3.6 million subscribers.

Being the prime beneficiary of high interconnection fees when compared to the other two operators with minority market share, MTN Rwanda prefers the current rate, saying that is reasonable. However, the company says it would be open to discussion with other stakeholders. 

“We are open to discussions with all stakeholders, but as an operator, we have a whole rate and cost structure, so we don’t expect much to change in our operating structures,” MTN’s Chief Operations Officer, Andrew Rugege said.

TIGO Rwanda argues that, in the process of setting the fee, international guidelines should be adhered to.
“Inter-connection rates are supposed to be the costs that Tigo incurs if another operator terminates a call on the Tigo network,” Tigo Rwanda Chief Executive Officer, Tom Gutjahr, said in an email.

He added: “There is a set of international guidelines on how to calculate inter-connection rates based on costs. We are confident that the ongoing study on interconnection which has been initiated by RURA will follow these standards.

“Tigo Rwanda believes that interconnection rates will go down and that this will be very beneficial to subscribers and the general public,” he noted.

For the last two years, MTN Rwanda and Rwandatel have been at loggerheads over the unpaid fees with MTN Rwanda seeking redress from courts of law.

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