RURA slashes interconnection fees

Mobile phone users are set to enjoy lower call tariffs after telecom regulator, Rwanda Utilities Regulatory Agency (RURA), ordered mobile operators to drastically reduce interconnection fees in a move aimed at encouraging fair competition in the industry.

Mobile phone users are set to enjoy lower call tariffs after telecom regulator, Rwanda Utilities Regulatory Agency (RURA), ordered mobile operators to drastically reduce interconnection fees in a move aimed at encouraging fair competition in the industry.

Under the four-year glide path, mobile interconnection charges— the fee telecom providers charge each other to transmit calls across networks—currently set at Rwf35, would fall to Rwf33 in January 2012, Rwf28 in January 2013 and Rwf22 in January 2014.

In July this year, RURA reduced the rate by 14.3 per cent to Rwf35 from Rwf40 as part of the recommendations that are contained in the study by PricewaterhouseCoopers (PWC).

“This glide path methodology was recommended by PWC as an industry best practice to implement an interconnection rate review without destabilising operator’s business plans,” RURA’s Director General, Regis Gatarayiha said in an email to Business Times.

“Gradual decrease has been implemented in the two operators’ (MTN and Tigo) commercial agreements that have already seen the rate fall from Rwf40 per minute to the current Rwf35 since July 2011.”

RURA views low interconnection fees as a form of incentive that would boost mobile penetration in the country in its bid to attain six million mobile phone subscribers by the end of next year,

 Lower interconnection charges would encourage operators to reduce their prices, meaning that the benefits would be filtered down to the end users.

RURA’s decision is also set to ease the tension within the industry, where Tigo Rwanda and the defunct Rwandatel relentlessly lobbied for the review of the rate, arguing that it was placing undue burden on consumers.

Prior to the review, interconnection fees had become the subject of serious concern in the local telecom industry as commercial courtrooms became the battleground for Rwandatel and MTN.

MTN dragged Rwandatel to court seeking legal action to recoup outstanding interconnection debts believed to be in the region of Rwf4b.

MTN has had a comparative advantage over its competitors because more calls are made on its network since it has more subscribers.

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