Interconnection rates in Tanzania are set to be reduced by 69 percent by the Tanzania Communications Regulatory Authority in March to improve competition within the country’s telecom sector.
Interconnection rates are charged by mobile network operators to other operators for calls made across their networks.
The proposed price is US$0.02 per second, which will be reduced from the current US$0.06.
Innocent Mungy, spokesperson for the TCRA, told Bloomberg the planned reduction is a result of a cost survey conducted by auditing company PriceWaterhouseCoopers (PWC).
The proposed interconnection price cuts have not been well received by the country’s various mobile network providers. Their concerns raised is that the reduction is too large to facilitate all at once as well as investments in telecommunications infrastructure may be negatively affected.
Among the concerned mobile operator’s is Vodacom, with 9.2 million subscribers.
“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’s Managing Director told Bloomberg.
Meza added: “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.”
Compared with an average of 100.5 mobile subscribers per 100 people in South Africa and 61.6 percent in Kenya, Tanzania has 46.8 mobile subscribers per 100 people.
Data compiled by the International Telecommunications Union concluded that for domestic calls per month, Tanzanian mobile subscribers spend an average of 56.7 minutes, Kenyans spend 84.4 minutes while South Africans use 137.9 minutes.
