The proposed drop in interconnection rates in
Tanzania may deter investors from the telecommunications sector, according to
Vodacom’s unit in the country.
Vodacom – which
is currently the biggest mobile operator in Tanzania with 9.2 million
subscribers – is arguing that the cut to interconnection fees proposed by the
country’s regulator will serve to deter investment in telecoms infrastructure
by industry players, insisting that the fees must properly reflect operators’
overall costs.
The
Tanzanian regulator – the Tanzania Communications Regulatory Authority –
announced earlier this month that it may cut interconnection rates, the fee
charged by operators for cross-network calls, by as much as 69 per cent, to
34.92 cents ($ 0.02). A decision will be made by the end of January,
according to the regulator, with the changes to be implemented as of March 1st.
“We have raised
concerns with the significant reduction proposed in March 2013 and the basis by
which the reduction has been proposed,” Rene Meza, Vodacom Tanzania
Ltd. Managing Director told Bloomberg.
“It is important
that interconnect charges are designed to reflect the actual costs of mobile
operators and the impact that the reduction will have on investment plans by
Vodacom and other national operators,” he added.
The
regulator has decided to alter interconnection rates pursuant to a survey
carried out by professional services firm PwC Tanzania which looked into the
costs of operators and the knock on effects to consumers in the
telecommunications sector.
“We are doing
this to encourage competition in the sector, and to ensure calling is
affordable to consumers,” explained regulator spokesperson Innocent Mungy.
However,
Vodacom’s complaints may carry some weight in the decision making process,
given that the company is currently carrying out infrastructure developments to
the sum of 18 billion Tanzanian Shillings ($11 million), with work expected to
last 18 months having started in December 2011.
Vodacom is also
collaborating with the regulator with a view to introducing number portability
to the Tanzanian market, in order to enable users to retain their mobile phone
number when switching to different operators.
Ventures-africa.com